Breaking an IVA

Innys

Hi,

Just need some information please.

If someone enters into an IVA, is subsequently gifted money and chooses to spend it rather than consult/agree this approach with their creditors, is this legal?

I suspect not and I appreciate the terms of the IVA will specify exactly, but I was just wondering.

Thanks

I

Charco_2

Its not no - i suppose it would be fraud of some sort.

By entering an IVA you are agreeing with your creditors to pay them all you can afford to. In turn your creditors are agreeing to afford you some amount of debt forgiveness (by writing off the remainder after the five year period).

How much is the amount of money you've been gifted? How long have you been in your IVA? How much are your contributions? How much were your debts before your IVA?



If you give the details we can give a better answer!

althas

There will be a clause in the IVA agreement that stipulates what needs to be done in the event of overtime pay, windfall etc. Generally (and mine is this), windfalls (gambling wins like the lottery, inheritance etc) will be paid 100% into the IVA

The IVA agreement is a legally binding document that has been put through the court system also, so yes I would say that it will be illegal, in breach of the court order etc

I would always say if in doubt talk to your IP and do NOT try and fiddle the system, for what you are receiving (a HUGE reduction in your debts) and the consequenses, it is not worth it

Innys

Um..... there seems to have been a misunderstanding.

It's not me who has undertaken the IVA. It is one of my GF's colleagues. I think it's unfair that someone should undertake an IVA and then ignore it when it suits them. We all end up paying for people like this in the long run.

Charco_2

Sorry ha ha, I suppose it doesn't matter to anyone on here who the actual person is... the advice is the same! (You'll know to change "you/him/them" to "her/she")

The point is though, as Althas says, the creditors are letting "whoever" off a significant sum of money and all they have to do is play ball - is it worth messing around with this for the sum she is being gifted?

The reason I asked for more details is that she could really make it work for her depending on the figures!

If the sum is small enough there may be no need to mention it really. If it is significant enough she may be able to do something clever like end her IVA early!

I wouldn't advise failing the IVA because that would put her right back to square one AND if the creditors thought there was value to be had they might pursue bankruptcy and try to take the gifted sum anyway!

Innys

I don't think she has any interest in ending her IVA early.

She has used the money to buy a new car........in her daughter's name to avoid it being traced back to her.

I'm seriously considering dobbing her in because I feel she's playing the system and, as I mentioned earlier, we all end up paying for people like this.

althas

Nothing about having the car in her name, the money will have to go through her bank account. IP's will want to see statements in the annual reviews. Hmm whya re you paying insurance premiums, you dont have a car.........and so on

To some extent I agree with you. People who use a system designed to help people sort themselves out, and abuse it, deserve all they get. It is not like there is no information out there to tell them about it, and that they were not told about things when they entered into the agreement. They just think Why should I, I want I want, and the Gollum standard "it's mine"................Rant over sorry :-)