IVA Failure...

[snowman365]

Dear Forum

What happens if an IVA fails? Bankruptcy? What happens with the IP's fees if you then have to go bankrupt?

[Reviva UK]

Hi there

there are many scenarios if your IVA fails and really depends upon why it has failed, how long you have been in the IVA and what you have contributed into the pot.

I am sure the IP's will confirm but there is little point in making you Br if you have no assets. It is more likely that your contributions will pay the initial IP fees and part of the creditors fees and you will be pursued for the balance.

[snowman365]

Hi Reviva UK and thanks for your reply.

But what if one reaches a point where they can no longer afford further payments due to a change of circumstance / loss of job / moving abroad or something like that?

If one was to petition for their own bankruptcy in such a situation what would then happen to the IP's fees? Would they also be wiped off in BR?

[MelanieGiles]

Any outstanding fees due to the IP would form an unsecured claim in the bankruptcy.

[snowman365]

Hi Melanie

Sorry but I don't understand what that means?

Would the bankrupt person have to pay back the IP fess?

[MelanieGiles]

The IP would get paid at the same rate as the other creditors under the bankruptcy proceedings, but only if there were funds to distribute.

[snowman365]

Hi Melanie

What if there were no funds, or very little, available and no sellable assets?

[MelanieGiles]

Then there would be no return to creditors.