Petitioned by bankruptcy for failed IVA

Soapy19

Hi,
I was 3 years in to an IVA. The original debt was £41k and creditors have received £33k through payments I have made.
Last year I was diagnosed with cancer and had a bit of a breakdown and wasn't able to make my payments to my IVA.
My IVA has since been failed and the IP has petitioned for my bankruptcy on behalf of my creditors.
I have since made contact with the majority of my creditors and started making monthly payments towards them. I can afford to clear them by the end of the year.
I have registered my opposition to the bankruptcy and outlined what I have done to remedy the situation but the IVA company is still going ahead with the proceedings.
Is the court likely to make me bankrupt for £8k if I've shown I am making payments and can continue to afford to do so?
If so, are there other fees that I am going to be made to pay?
I'm scared and don't want to be made bankrupt after everything else I and my family have been through.
Can anyone give me any advice as to what to expect?

sourcrates

Hi,

Do you have assets to protect ?

Seems harsh to pursue bankruptcy under those circumstances, do you owe 5k or more to any one creditor ?

The bankruptcy threshold is 5k, so only a creditor you owe 5k or more too, can make you bankrupt.

On the flip side, if you have no assets, then you won’t have to pay anything, unless you have disposable income of £20 or more, then an IPA would be payable for up to 3 years.

Soapy19

Thanks for your reply sourcrates.

I own a property with my partner which has some equity in it and have a car.

No, I don't owe 5k or more to any one creditor, the max one is under £2k.

I'm just concerned that if they make me bankrupt I'll have to pay the debt off (which I'm willing to do anyway) plus I'll have to pay fees etc and they'll take my car and make me sell my home.

Can they make me pay back more than I actually owe?

sourcrates

No of course not, you have to owe individual creditor 5k or more to be made bankrupt, have you spoken to your IP ?

They cannot just make you bankrupt either, you have the chance to put your case to the judge beforehand.

Info here:

https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/bankruptcy-2/creditors-making-you-bankrupt/creditor-trying-to-make-you-bankrupt/

https://debtcamel.co.uk/when-iva-fails/

normanna

Are you sure you've paid the creditors as much as £33k? Your payment to your IP includes their fees so not everything you do pay goes to your creditors

sourcrates

Another way out of it is to pay down the debt to less than 5k then bankruptcy is impossible.

Soapy19

Yes, absolutely certain that much has been paid to my creditors. I've paid over £40k into the IVA and the £33k is what has been distributed.

I tried speaking to my IP when they first said they were petitioning for bankruptcy but they won't budge.

Soapy19

I hadn't thought about trying to pay it down to below £5k, but i will try and see if I can borrow from my parents to do that

Soapy19

Also, I have made further payments since they sent the petition, so the IP doesn't actually know how much money I owe anymore..

Minkym00

I think the issue here is "the IP has petitioned for my bankruptcy on behalf of my creditors" which means that they are petitioning the total debt and not one individual debt, so that rule doesn't apply. As you have assets then the IP knows they will likely get their petitioning costs back so it's no skin off their nose to do it.


Great advise above. Beg, borrow or steal (not literally!) and get the total debt under £5k

Soapy19

Thanks Minkym00, I'm getting on the case now to try and get the funds to reduce the debt below £5k