Can you be an attorney for a Lasting Power of Attorney if you have an Individual Voluntary Arrangement (IVA)?
Can you be an attorney for a Lasting Power of Attorney if you have an Individual Voluntary Arrangement (IVA)? This is a question I was asked recently; to find out I had to do a little detective work and will reveal the answer here.
Before going through the steps I took, I will put the question in a little more context by explaining the terms involved.
A Lasting Power of Attorney is a legal document that enables you to appoint a person (or persons) to speak for them if they ever lose capacity to speak for themselves.
This gives you more control over what happens to you if you have an accident or an illness and cannot make your own decisions.
You can find out more here
A Debt Relief Order (DRO) is a way of dealing with your debts if you can’t afford to pay them. It means you don’t have to pay certain kinds of debt for a specified period (usually 12 months).
At the end of the DRO period, the debts included in it will be written off (‘discharged’) and you won’t have to pay them.
If you obtained any of your debts through fraud, you will have to restart paying them when the DRO has ended.
If your circumstances change so that you are able to pay some or all of your debts, your DRO may be revoked so you can arrange to pay your creditors (the people or companies you owe money to).
(Source: https://www.gov.uk/government/publications/getting-a-debt-relief-order/getting-a-debt-relief-order)
You can find out more here
An Individual Voluntary Agreement (IVA) is a formal and legally binding agreement between you and your creditors to pay back your debts over a period of time. This means it’s approved by the court and your creditors have to stick to it.
While you have an IVA your creditors should stop:
charging interest on your debts
chasing you to pay your debts
While you’re in an IVA you must:
make the agreed payments - this is usually a single monthly payment or a lump sum
let your IVA provider know if your income increases or you get any other money
not take out any new credit without permission, for example loans
You can include any amount of debt in your IVA. There are no minimum or maximum limits. The fees for an IVA are high so if your total debt is less than £10,000 an IVA might not be the best option.
If you don’t have a lump sum of money or regular amounts to pay into an IVA, you should check other options for getting out of debt.
You can find out more here
Choosing an Attorney
When choosing attorneys for a Property and Finance Lasting Power of Attorney it must be established that any proposed attorney is not bankrupt or subject to a Debt Relief Order (DRO); either of these would preclude them from being an attorney. This does not impact their ability to be an attorney for a Health and Welfare LPA.
When working with clients to make a Property and Finance LPA , I check the possibility of bankruptcy or DRO in the consultation process being mindful of the potential sensitivity around the question.
During a recent consultation I was informed that an attorney selected by my client was subject to an Individual Voluntary Arrangement – would that be a problem? I wasn’t sure of the answer and my first port of call was to check the LP12 Make and register your lasting power of attorney: a guide . From this I could only find information abut bankruptcy.
The guide explicitly mentioned bankrupt and Debt Relief Orders, but had no reference to Individual Voluntary Agreements:
My next step was an internet search, and asking the question “can you be an attorney for Property and Finance if you have a Debt Relief Order?” I tried changing words to come up with a definitive answer, but couldn’t find one that give the assurance I needed.
Lastly, I made a call to the Office of the Public Guardian helpline for professionals. I tried a few times, aborting some when I was thirty or more on a queue. When I connected and asked the question the person could not provide an answer, I felt a little validated at this point as I had imagined I was just missing something very obvious. I was put on hold for the person to contact a more senior member of the office of the Public Guardian team and after a short time I received confirmation that yes, indeed a person can be an attorney if they have an IVA.
A shout out here to the Office of the Pubic Guardian Team, once connected I have always found them incredibly helpful.
I was delighted to have learned this, to share with my client and to progress with their LPA. Every time I find something a little out of the ordinary drafting an LPA I use it as a blog to help others.
Conclusion
In conclusion, yes, a person can be an attorney for Property and Finance if they have an Individual Voluntary Agreement in place.
If you have a question you would like answering about lasting Power of Attorney, or would like support in drafting your Lasting Power of Attorney. I’d also love to hear from you if you have a question you cannot answer about Lasting Power of Attorney or any element of Advance Care Planning, you never know, you may be the inspiration for my next blog!
