Reply To: Overpayment Recovery

Gary B

'IVA's are very different animals and do not affect recovery of HB overpayments at all….as the largest IVA provider admitted to a member recently'.

Regarding the above, I did try to ignore an IVA recently and received some correspondence from a firm of solicitors quoting R (Balding) v Secretary of State for Work and Pensions [2007] EWHC 759 (Admin). They stated Paragraph 1 (g) of R3 standard conditions, version 2 dated November 2004 defines "debt" as having the meaning given to it in section 382 Insolvency Act 1986 together with the modifications necessary to refer to a voluntary arrangement. The definition of a bankruptcy debt in section 382 Insolvency Act comprises any debt or liability to which the debtor is subject at the commencement of the bankruptcy, any debt or liability to which he may become subject after commencement of the bankruptcy by reason of any obligation incurred before the commencement of the bankruptcy and also includes a liability in tort together with liquidated and unliquidated debts and contingent or future debts.

The Balding case was approved by the Supreme Court in the case of Secretary of State for Work and Pensions v Payne [2011] UKSC 60 in which it was held that social fund loans and overpaid benefits were provable bankruptcy debts and were debts for the purposes of a Debt Relief Order.

I would love to ignore IVA's and continue recovering overpayments but if that was tested and we lost it would not go down well and the above seems like a reasonable argument.

I suppose until an LA takes a stand and the IVA practitioner goes to Court we are stuck. I know you will probably say the IVA practitioner will never go to Court but I can't take that risk. 

Regards Gary