IVA - QQ - not all debts included

vodka_needed

Hi

If an IVA was set up 2 years ago (and has one year left to run), but it didn't include a debt that was joint, what would happen if the person paying the debt (the one without the IVA) went bankrupt?

Should the debt have been included in the IVA? (and therefore both parties making payments?)

Many thanks

judojub

Hi. I believe the joint debt should originally have been included in person A's IVA. That would have covered person A's share of the joint debt but meaning that the creditor would chase Person B for the rest of the debt outside of the IVA.
I am sorry but I am not sure about the bankruptcy side of things. Stick around and somebody with lots more knowledge will step up and help.
Incidentally. Whats the reason for the 3yr IVA? I only ask because IVAs are normally 5 years unless a sum is offered early as a full and final.

vodka_needed

judojub wrote: »

Hi. I believe the joint debt should originally have been included in person A's IVA. That would have covered person A's share of the joint debt but meaning that the creditor would chase Person B for the rest of the debt outside of the IVA.
I am sorry but I am not sure about the bankruptcy side of things. Stick around and somebody with lots more knowledge will step up and help.
Incidentally. Whats the reason for the 3yr IVA? I only ask because IVAs are normally 5 years unless a sum is offered early as a full and final.

Thanks
That's what I thought too. I have no idea about the 3 year IVA - it's just what I have been told.

judojub

Just thought I would also mention as well that only unsecured debts can be included in an IVA.!

Charco_2

What age is the person in the IVA? (I'm only asking as it can be relevant for the three year IVA!)

The person in the IVA needs to speak to their IP to deal with the outstanding debt. They MAY be able to still include the debt into their IVA but this will depend on the circumstances... also if that results in a significant adverse affect upon the dividend they may have to extend the IVA to somehow rectify that (if it's possible). They should do this NOW because there is no point paying for another year only to find out it's going to cause problems.

The debt should have been included in the IVA and the party not in the IVA would have become solely responsible for repaying that debt - by going BR they would then not be responsible for the debt, no-one would!
By not including it in the IVA, when the person completes their IVA and the other goes bankrupt then the IVA person would still find themselves responsible for the debt... WORSE, this could actually affect the success of the IVA since they would now be trerating that forgotten debt preferentially (ie, the other creditors got xpence in the £, but now this creditor will be repaid in full!)

Contact the IP/ Supervisor before it is too late!

vodka_needed

Charco wrote: »

What age is the person in the IVA? (I'm only asking as it can be relevant for the three year IVA!)

The person in the IVA needs to speak to their IP to deal with the outstanding debt. They MAY be able to still include the debt into their IVA but this will depend on the circumstances... also if that results in a significant adverse affect upon the dividend they may have to extend the IVA to somehow rectify that (if it's possible). They should do this NOW because there is no point paying for another year only to find out it's going to cause problems.

The debt should have been included in the IVA and the party not in the IVA would have become solely responsible for repaying that debt - by going BR they would then not be responsible for the debt, no-one would!
By not including it in the IVA, when the person completes their IVA and the other goes bankrupt then the IVA person would still find themselves responsible for the debt... WORSE, this could actually affect the success of the IVA since they would now be trerating that forgotten debt preferentially (ie, the other creditors got xpence in the £, but now this creditor will be repaid in full!)

Contact the IP/ Supervisor before it is too late!

Hi

The person is in their mid-late thirties
The debt is for over £20k so I'm not sure it could just be added into the IVA?

Mr_Moosey

I had an IVA and it has been paid off in full. I made an error in that even though my joint bank account was included, my wife was not part of the IVA. Consequently, the bank was owed £4k, they recieved £500 in regular payments and £1,700 in a lump sum (I cleared my IVA 4 years early). The bank sold my debt to a Debt Management Company. They in turn increased the "debt" to £4,700. So, the bank have recieved £2.2k from me and sold on the debt. The debt management company have now gone after my wife for the amount of £4,700. The bank refuses to correspond with us and our MP (he is a cabinet misister) gets ignored. We have had threatening telephone calls and mail. In the end we had to move home. Thankfully, my wife's credit rating is still excellent. The moral of the story, include EVERYTHING in your IVA and if its a joint debt, either pay it off or enter into a joint IVA.