IVA - Mortgage Shortfall

dp_polo666

A family member entered an IVA in 2015 (mainly due to two properties in massive negative equity)

Both mortgages shortfall were included in the IVA and the banks came into procession.

Santander sold their property, made the shortfall unsecured and closed the IVA in 2021.

Birmingham Midshire defaulted the mortgage and never sold the property. They continued to take direct debits and the mortgage is up to date and being paid now. 

My understanding is that Birmingham Midshires should only have got the funds from the IVA and not these additional funds. Am I missing something?

Regards 

DP

ManyWays

I think its unusual for a mortgage shortfall for a property that hasnt been repossessed to be included in an IVA. So my first thought would be to read in detail the IVA paperwork to see what that said. 
But my second thought is that a form of insolvency, whether it is an IVA or bankruptcy, doesnt override the security that a mortgage lender has, and that if they wanted to carry on living in the property they would have to pay the full amount. (That is certainly how it works in bankruptcy if there is negative equity so the Official Receiver has no interest in it.)