IVA and tax rebate

RainStarr_2

My friend is in an IVA second year of a 5 year term. The total amount to be repaid to the IVA over the 5 years of £24,000 and the Inland Revenue are witholding a tax rebate of £23,000(accumulated over the past two years as an overpayment of tax) and are saying that this amount has to be paid to the IVA (as a windfall???)

Does this mean that he will be free of this IVA if they take the whole amount? If not, how much will they want before finishing the IVA as the £23,000 will pay off the IVA amount remaining in full.

Please advise
Thank you

FoggyBrain_2

The amount payable undr the IVA is not usually the amount of debt owed. While the IVA is running the total debt still remains owed, plus IP fees and interest at 8% per annum. It is only at the conclusion of the IVA when the surplus owed (in this case the amount over £24k) is written off. This money from HMRC is a windfall and is payable into the IVA on top of the intended dividend of £24k. If this windfall and the payments made so far (or when the payments get to this level) pay back the total debt, IP fees and interest the IVA can be concluded.

Daisy4567

Any chance it could be used as a F&F?

FoggyBrain_2

Doubt it Daisy -- looking from the creditors point of view it's their's anyway :-(