Partner's IVA has failed. What now?

northernpainter

Hello folks,
my partner has been in an IVA for 3 years, but during that time has had at least 1 6 month payment break (agreed with the creditors) due to him losing his job and being unable to pay. He has made some payments, the first year in full, the second year about half, and third year he's about 6-8 months in arrears but back in work with means to pay, it's tight (his wage is low) but I am comfortable enough to cover our expenses and leave him with his wage.
regardless, (and understandably, given his situation and inconsistency of payment history) the creditors have notified him that the IVA is failing / has failed. I'm unsure if it has failed for sure, but from my reading, it's likely it has, plus he's now starting to get letters about the remaining debts which have been passed to other agencies.
Hoping for some advice please, especially on the below:

• How do we know if the IVA has definitely failed, should he receive some kind of statement saying how much is left outstanding?
• what should we be doing in terms of contacting the creditors / collections agencies now in charge of the debt? are there templates we should be using to deal with them?
• i'm assuming the creditors will now try to petition for bankruptcy, how does this work, and what should we do?

any advice would be very much appreciated,
thank you,

northernpainter

sourcrates

Hi,


The very last thing your IP wants is for the arrangement to fail, is he still paying at the moment ?


He needs to speak to his IP`s office and find out for definite what is going on.


Don`t `do anything in regard to the creditors until you know what is happening with the IVA, until you are informed of its failure in writing, assume it is still viable, remember, he is legally protected from further action as long as it is still running.


Making him bankrupt is an option after failure of an IVA, but if he has no or few assets then it is a waste of time and money doing that, and it does not happen automatically, infact he may find things will just go quiet for a year or two, before the debt collectors letters start coming through the door again.


One step at a time, find out about the IVA first.

northernpainter

thanks Sourcrates -
he's already started receiving notification letters from debt collectors that the debt has been passed to them from nationwide and others, and they are calling his old address (which is actually his parents) - I'm trying to gather the letters and correspondence together as I think I'm right in saying if it's failed he should have received a statement and it in writing, is that correct?

he said the person managing the IVA called him and said it was failing, but he is sketchy on the details. i'm afraid he is burying his head in the sand a little bit.

he has no assets - the car we have is his fathers, the house we've just moved into I bought myself, as with all of the things in it, and utilities etc. I have bought everything from the groceries to his trainers - he literally has nothing of value they could recover or sell.
what, besides bankruptcy is the other option? we don't have savings enough to repay the debt.
thanks again for your help.

sourcrates

Debts are bought and sold all the time, its very possible the new collectors know nothing about the IVA, information is not shared as you would think.

He needs to call the IP`s office as soon as possible and find out the status of the arrangement, it may be it can be salvaged, that would be the prefreble option, you should get some kind of statement eventually (if its failed).

Its unlikely his creditors would opt for Bankruptcy as with no assets to realise it would be a waste of time and money, more likely they would go down the court/CCJ route and get attachment of earnings orders as he is working, which means he could be paying the debts for a long time, it may be a wiser move for him to declare Bankruptcy himself, and have a guaranteed fresh start.

fatbelly

If it's been terminated, he will have been notified of this in writing and the entry on the register

https://www.insolvencydirect.bis.gov.uk/eiir/

will be changed to show this.

If it hasn't yet been terminated he could try this, but there's no guarantee it will work.

https://debtcamel.co.uk/cant-afford-iva-payments/

!!!8220;Varying the terms!!!8221; can mean almost anything, but there are some approaches that you might want to consider discussing with your IP.

The best one, if it is acceptable, is for the IP to propose that your creditors accept that your IVA has been completed on the basis of the money you have already paid, so your remaining debts will be written off. This is more likely to be agreed the closer you are to the end of your IVA !!!8211; in your last year it is very likely, in your first year it isn!!!8217;t going to happen.

Beyond that, if he has no assets, it's not clear why he did an IVA rather than bankruptcy anyway. So later rather than sooner he will need to stump up £680 for bankruptcy

northernpainter

thank you for the link - I've just searched and the IVA is listed as failed on April 17th.
As the IVA address was his parents address (we were living there at the time) we think the statement or any letters will be there, so he's gone there today to collect post and bring it all back here.

while he is working, he's still in probation (start period) of his new job, and suffers with mental health issues which means he's had some time off (and was ultimately the reason he's lost jobs in the past and entered the IVA to begin with). there is the possibility that his current employer may not continue him past the date of his probation review, as other employers have opted not to in the past (long story short = time off for mental illness equates to sporadic and unpredictable attendance from employee, equates to more hassle in the long run in the employer's POV).

So it seems from what I'm reading, him declaring bankruptcy is the best option? i can cover the bankruptcy fees for him.

sourcrates

Well at least that clears things up then.


He can progress from this, Bankruptcy is a much simpler, less invasive process than it ever has been, the entire process is carried out on line, by post, and on the phone, there is no longer a requirement to appear in court either, everything is arranged by the OR and the insolvency service.


All his debts will be covered, and there is no chance of it failing.

fatbelly

Online process, website here

https://www.gov.uk/apply-for-bankruptcy

£680 fees with no remission.

Probably best to check with someone that there is no good reason why he shouldn't apply for bankruptcy. National Debtline are good.

https://www.nationaldebtline.org/

jonesMUFCforever

OP if he declares himself bankrupt - make sure that you do not have any joint accounts or important payments going out of any sole accounts in his name as banks will often freeze bank accounts when bankruptcy is declared.

northernpainter

thank you all for your help - and yes, I've made sure for the last 4-5 years that our finances are separate, even had a legal doc (cohabiting agreement) drawn up before we moved in which demonstrates that the house and all of our other belongings have been bought by me - so we have been careful to keep things separate.
i transfer money to his account to keep him topped up as and when he needs money, but my wage is 3x his, so all utilities and bills come out of my account.

thanks again for your help, we'll speak to the debtline charities for some final advice and then yes looks likely he will proceed with applying for bankruptcy.