Failing IVA whats the options

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Hi, I have been in an IVA since 2009 and recently had a variation meeting with the creditors and my IP has told me today they have declined my offer and want to fail the IVA. A year ago my partner and I split up (its a joint iva) and I couldn't afford the repayments so didn't pay for about 6 months which the IP wasn't concerned about. We got back together and contacted our IP who did a new income and expenditure etc etc and went back to the creditors with a reduced offer, to take our house out of the iva and wipe the arrears. They turned it down. I told my IP to increase the offer by £100 and he sounds dubious but would try. The IP also said the other way round it was to let it fail and do a new iva i.e. start from scratch, this has made me a bit suspicious as this would probably incur a whole load a new charges for them and I didn't think you could start another iva if one had failed! It has also taken them a week to contact me to tell me this and only have till Tuesday until the failure is instigated. I asked what would happen if it failed and he said that we could be made bankrupt and as we own our own home we could lose it and with a young son i really don't want that to happen. I have been told that because of the neg equity in the house they won't make me sell it but some are saying they will. I really need some advice as to the options so any gratefully received. Thanks

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  • Depth_Charge
    Depth_Charge Posts: 970 Forumite
    First Post
    Options
    Hi, I have been in an IVA since 2009 and recently had a variation meeting with the creditors and my IP has told me today they have declined my offer and want to fail the IVA. A year ago my partner and I split up (its a joint iva) and I couldn't afford the repayments so didn't pay for about 6 months which the IP wasn't concerned about. We got back together and contacted our IP who did a new income and expenditure etc etc and went back to the creditors with a reduced offer, to take our house out of the iva and wipe the arrears. They turned it down. I told my IP to increase the offer by £100 and he sounds dubious but would try. The IP also said the other way round it was to let it fail and do a new iva i.e. start from scratch, this has made me a bit suspicious as this would probably incur a whole load a new charges for them and I didn't think you could start another iva if one had failed! It has also taken them a week to contact me to tell me this and only have till Tuesday until the failure is instigated. I asked what would happen if it failed and he said that we could be made bankrupt and as we own our own home we could lose it and with a young son i really don't want that to happen. I have been told that because of the neg equity in the house they won't make me sell it but some are saying they will. I really need some advice as to the options so any gratefully received. Thanks

    Hi

    Could you put up your SOA (joint & seperate if possible)?

    Was the interlocking IVA for 5 years with a 4/5th year clause regarding your home in relation to a re-mortgage or 12 month extension to the IVA?

    How much were the payments into the IVA?

    How many payments have you made into the IVA and how much of this has gone in fees?

    Was bankruptcy clearly advised and explained at the outset of the IVA along with other options and would it not be an appropriate solution anyway?

    Just out of interest who is telling you that 'they' will make you sell your home with negative equity in a bankruptcy situation?
  • Mrs_Impatient
    Options
    HI

    Yes was an interlocking IVA over 6 years with house to be remortgaged at end of term if possible, or 12 month extension.

    Repayments were £310 per month (wanted to reduce to £250 as was struggling to live) don't know how much has gone in fees (dread to think).

    The IP mentioned that BR could be a possibility and that "they" (creditors) could push for it.

    Could one of us go BR and other go on a debt management plan as house is in joint names.

    Thanks.
  • Depth_Charge
    Depth_Charge Posts: 970 Forumite
    First Post
    Options
    HI

    Yes was an interlocking IVA over 6 years with house to be remortgaged at end of term if possible, or 12 month extension.

    Repayments were £310 per month (wanted to reduce to £250 as was struggling to live) don't know how much has gone in fees (dread to think).

    The IP mentioned that BR could be a possibility and that "they" (creditors) could push for it.

    Could one of us go BR and other go on a debt management plan as house is in joint names.

    Thanks.

    Hi

    Some of this seems a little odd to me, but then, I dont know the full circumstances

    I dont really see why anyone would wish to make you bankrupt if there are no assets or how you could be forced to sell your house in bankruptcy if there is negative equity. IVA companies & creditors are not really in the habit of throwing away money if there is no return and IVAs are not set up with charity to the debtor in mind.

    There could be issues surrounding high expenditure allowances for mortgage and secured loan costs in bankruptcy as far as the O/R is concerned (ex could you move to somewhere smaller or cheaper depending on circumstances).

    If the IVA is officially failed without you being made bankrupt then you may have a number of opitions including the ones you have mentioned but it is difficult to say here due to the limited information you have provided and that the IVA is still live so to speak.

    Your IP should know all this, did the IP advise you on bankruptcy & debt Management Plans at the outset of the IVA and have you asked the IP about this scenario as part of the current situation.

    Where you advised on all your options at the outset of the IVA such as the above?

    Just take this post as a loose guide only as you have only provided limited information.

    Speak to your IP again and maybe get a second or third professional opinion and it has to be your decision at the end of the day

    Could you put up you SOA both joint and seperate as that would help?
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