my daughter tells me she asked the iva company to make her bankrupt and they said they could not as there was insufient funds in her fund even though she had paid in for over three years regularly whilst working she would prefer this option but could not afford to the 400 pounds she has been told it would cost is this correct ithought iread somewhere the iva co should hold funds back in case of failure?thanks
Even though your daughter has been paying in for three years, I imagine some of the money has already been paid across to the creditors.
Unless her chairmans report states that funds would be held back, then they won't be. Mine won't be keeping any back if things go wrong for me.
To go bankrupt actually cost £495.
I presume your daughter is still paying her monthly money across? If so, and she stops paying for three months, her IVA will fail and she could use that money to pay to go br.
Is there any reason why she wants to go down this route as she is over halfway through her IVA? Are the payments too high? If so, she needs to speak to her IP and see if she can pay less. The IP has a certain amount of discretion and can lower the payments by a small amount (I think it's 15%) anything more than that it would have to go back to the creditors to agree, but it is possible.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Whether or not funds are held back to petition for bankruptcy in an IVA depends on what is written in the proposals (as modified at the creditors meeting and detailed in the chairman's report).
The Supervisor of the IVA will have strict criteria to follow (also in the proposals/chairman's report) as to when and why he can use those funds to petition for bankruptcy. Normally only when there has been a default in the payments or the person subject to the IVA has not co-operated with him or her.
A Supervisor would not be able to petition purely on the basis that the person subject to the IVA asked him or her to.
Like Jan I would ask why your daughter now wants to go bankrupt, especially when she is over half way through her IVA. She should talk to the Supervisor of her IVA about this. As Jan suggests he or she can always go back to the creditors to ask them to accept reduced payments.
I would not suggest that your daughter stops paying to her IVA until she has discussed the reasons why she no longer wants to continue with the IVA with her Supervisor and taken detailed advice about bankruptcy
Kind regards, Elizabeth Pywowarczuk, Insolvency Practitioner.
If you would like me to advise you about an IVA and if appropriate propose one for you, please visit my website at www.liberta.uk.com
These days, creditors no longer want to see the Supervisor petitioning for bankruptcy, as they would prefer to be able to pursue their former customer directly if the IVA has failed.
If there is provision in the IVA for funds to be held for such purpose, the Supervisor could still call a meeting of creditors to see if that was what they really wanted, or approach some of the major creditors to see if they really wanted to see this followed through.
Does your daughter have any assets which would be at risk from the claims of creditors under bankruptcy proceedings?
