Can an IVA, complete on medical grounds?

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IVAconfused75
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by IVAconfused75 » Thu Sep 28, 2017 6:14 pm
Hi.
I'm just curious to know that if an IVA was set up when a person was potentially not in the position to make financial decisions due to medical grounds; i.e a form of mental illness and with information to support this, could an IVA be considered to complete earlier or with a type of final settlement.
I have looked at missold reasons regarding an IVA, but I haven't seen anything regarding health or whether it would be a genuine reason if a complaint was made.
I know of wills being made at a person's stage in life, only to later develop a mental illness and unable to remember what they had written or signed, leading to beneficiary confusion.
I hope I've explained this clearly.
Apologies if I haven't.

Thanks.
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Foggy
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by Foggy » Thu Sep 28, 2017 6:34 pm
If the IP was unaware of mental incapacity at the time there is not likely to be grounds for miss-selling. It is possible that the arrangement could be set aside, but this would involve a lengthy and potentially costly court case for a ruling. Your use of the word "potentially" would make this seem a difficult proposition for a positive outcome.

It is always possible to conclude an IVA successfully with a Full and Final offer for many reasons and ill health being a particularly pressing one -- this would however, need the agreement of the creditors.
IVAconfused75
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by IVAconfused75 » Thu Sep 28, 2017 7:39 pm
The IP was unaware of the mental incapacity at the time, however the creditor was aware of this, as they made enquires during the time the debtor was in hospital and corresponded with the family members during this time, regarding outstanding mortgage payments.
If the debtor felt the creditor pressured and manipulated them either via suggestion, phonecalls or letters into entering an IVA as the only best debt solution for the debtor or risk the threat of them losing their home, is that something the debtor could get looked into by an independent person?
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Foggy
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by Foggy » Thu Sep 28, 2017 7:46 pm
IVAconfused75 wrote:
The IP was unaware of the mental incapacity at the time, however the creditor was aware of this, as they made enquires during the time the debtor was in hospital and corresponded with the family members during this time, regarding outstanding mortgage payments.
If the debtor felt the creditor pressured and manipulated them either via suggestion, phonecalls or letters into entering an IVA as the only best debt solution for the debtor or risk the threat of them losing their home, is that something the debtor could get looked into by an independent person?



The IPs are governed by their own regulators who, basically, will not overturn or suggest any course of action, but levy a fine if found applicable. The creditors, on the other hand, are overseen by the FCA who do intervene if they see fit.
IVAconfused75
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by IVAconfused75 » Thu Sep 28, 2017 8:00 pm
Thanks for this information Foggy.
I will take it on board and any other angels from professionals on this forum.
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sheraz.butt
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by sheraz.butt » Thu Sep 28, 2017 8:54 pm
It is a very tricky one as there are a couple of parties involved so would be very difficult to pin a blame in regards to miss-selling or overseeing someone's mental health if not logged and mentioned in the early stages.
redboxtree
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by redboxtree » Fri Sep 29, 2017 8:00 am
I am not a medical professional but there are a number of conflicting issues including that having a physical or mental illness does not mean there may be a lack of capacity.

The creditor that you reference would have no obligation to disclose any information that they held to other parties when agreeing to the IVA PLUS it may have been seen as an indication that controls were being put in place.

Other factors would include that during the course of the IVA has the person who was experiencing problems continued to maintain payments - if so the IVA company would have no indications that there were other issues.

I am not an apologist for the vast majority of IVA companies and there are clear indications that at times some companies have deliberately ignored these types of issues and just focussed on the money side so they could have the business.

Having said that they cannot take responsibility for something that they were not told about.
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Michael Peoples
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by Michael Peoples » Fri Sep 29, 2017 11:01 am
We have procedures for dealing with vulnerable clients as mental incapacity alone is not a bar to obtaining credit or entering into an IVA. We need to be confident of the debtor's understanding however and will engage with family members, social workers etc to ensure that anything proposed is the right thing to do.

A mortgage company may have advised that the debtor look into an IVA which would not be bad advice. In an IVA the mortgage payments take priority over unsecured so perhaps the advice was intended to protect the debtor as well as the lender.
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