IVA going to Bankruptcy

[Steve Austin]

My wife and I are both Directors in our Company. We have both entered into an IVA which we pay seperatley on debts built up from the past.

Business is down gone right down and we cannot afford these payments of the IVA.

Can one of us become bankrupt and the other continue with the business and the IVA in their name. Which would guarantee the IVA for one of us had a chance and the business could continue on a smaller scale to fund the IVA.

Would this be seen as right or wrong and could people think that we planned to do this all along.

[plasticdaft]

This is one for the real experts so I will bump it back up a bit.

[Steve Austin]

thanks I may of made it sound more tricky than it actually is..

[MelanieGiles]

There is no problem in one of you changing your minds about the IVA - especially given your changed circumstances. The party who is going bankrupt will have to resign as a Director, but the other one can remain in office.

[Steve Austin]

Thankyou for that.

Would the one of us continuing with the IVA be expected to pay to the creditors for the other in the bankruptcy.?

[MelanieGiles]

No - bankruptcy proceedings are very individual, so the bankrupt party would only make contributions based upon their disposable income.

[Reviva UK]

Hi

There are a couple of things you will need to review prior to considering bankruptcy:-

1. Does the company have any value / assets as these may come into your bankruptcy. If the Ltd company is simply a trading style for tax that is not a problem.

2. One of the restrictions is that you cannot be a director of a ltd company in Br so one would need to resigne prior.

3. Bank Accounts - business & personal - need to be addressed.

4. Directors loans from the Ltd company to you

5. etc etc

6. Moving from an IVA to Br has a specific process and need not be rushed. You are unlikely to have any creditors chasing you because you are still protected by the IVA until it has formally failed. Certainly worth having a discussion with your IP - if you are certain this is for you they will need to review the 2 linked IVA's and do some work there.

The IVA company will also formally need to fail the IVA - 3 - 5 months - and you will need the certificate or at least a letter from the IP for court. Some judges don't sign your Br petition unless they know that your IVA company is fully aware and that the IVA has failed.

just some thoughts.

Which IVA company are you with?

[Steve Austin]

Both the IVA are individual and i dont think are linked.

The company has no assets.

It would be that we couldnt afford to pay both IVA;s now that work has started to fall. But If say I continued with the IVA then I could be the director and pay the IVA and still run a business, while my wife went bankrupt and her part of the IVA fails. She resigns from the Company.

Just makes life easier, but sounds a bit dodgy, I was just wondering if that was correct to do this before I approach our IP

[Reviva UK]

Always better to discuss the matter with your IP first. Depending upon your situation they may be able to help or even there may be oportunities to modify the IVA.

either way there is no need to rush into anything. If you decide on the br route there are is a process to follow and some other things that need to be done because of the Ltd company so tread slowly, speak to the IP and see what they suggest.