IVA about to fail

Catalyst

Well it looks like my IVA is about to fail. Our original IVA loan amount was £55K to pay. However, due to a shortfall on a property sale we are an exra £60K in debt. We put in a F&F offer of £50K but our IVA company feels that this will be declined. So we will be forced to go BR and our creditors will get even less that £50K we originally offered. If we come out of the IVA can we try settling payments with creditors ourselves - are they more likely to accept a less amount or go for BR?

fermi

Unless you have a property/assets with significant equity, then it's exceptionally unlikely that any creditors would petition for your bankruptcy. It would cost them a fortune in fees, and likely get them nothing.

You could lay it on the line to creditors. As in, "if you do not accept a full and final, then I will go bankrupt and you will get nothing".

You would have to get all/most creditors to agree before you paid anything though, otherwise if you still had to go BR you would have favoured some creditors over others which is a big 'no-no'.

Catalyst

Many thanks Fermi. Its good to hear that there is a possibility of potentially not going BR, so we can approach the creditors outside of the IVA. I don't understand why they would accept an offer from us and not through the IVA company. Should the IVA company not be pushing for this settlement?

FoggyBrain_2

You should make the offer Fermi suggested through your IP. He is obliged to present your offer to the creditors, and it is a reflection on his presentation skills as to whether they accept or not. At the end of the day this is YOUR IVA and YOUR proposal, the IP cabn give his opinions and recommendation, but the decision falls to the creditors.

FavDaughter1

you've got nothing to loose,make the offer! let us know how you get on.