they are worried sick , parents are pensioners

[julesl]

My friends have had an iva for 3 years they have kept up payments. they sold there house paid of there mortgage and now rent they had 8,000 profit which went to pay back family members who had lent them money to improve the house so they could sell, the money was sent to them by the solicitor the iva company now say the money should have gone to them!! and the solicitors have made an error now there is a problem with the people who bought there house(something to do with land registry) because legally the house should not have been sold??

They have no money and the company debtbusters are now demanding the £8,000 within 3 weeks they said if they go bankrupt the people family members they paid will be purseud for the money and could be made bankrupt thereselves is this tosh!!! they are worried sick because there parents are pensioners, Should they just go bakrupt and see what happens? they have no assets.

[MelanieGiles]

Hi jules and welcome to the forum

I fear that the IP is probably correct here, in the monies should not have been paid back to family members - but the key point is to identify whether the property was actually included in the IVA or not.

Could you confirm the position here please.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[julesl]

Hi Melanie
The house was not included in the IVA and the mortgage was kept up to date

[MelanieGiles]

OK - so if the house was specifically excluded from the IVA, the IP has no right to receive any monies from the sale proceeds. I would just double check this to be sure though.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[scottm]

Hi Melanie,
How could this be checked to be certain that the house is not included in the IVA. The paperwork is so confusing. I do remember something about there being something put onto the land registry, which is how this has all come about, as our solictor has now advised the new owers solicitor is unable to register with land registry. However when verbally asked about the house sale with the IP we were advised that the house could be sold and that there was too little equity in the house for a remortgate to be an option. Our IP are dealing with the solictor directly as apparently we have been advised they are in breach. Thanks for your help.

[MelanieGiles]

There would have been no need for any filing at the Land Registry if the property had been left out of the IVA. It suggests to me that it was not. If you are unable to confirm this from the IVA paperwork, I think your friends ought to instruct solicitors to act for them.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[scottm]

Thanks Melanie, we have an insolvency practitioner in our town, would they be able to help us? could you suggest why type of solicitor if not in lutterworth area (leicestershire) could we have any recall with our conveyancing solicitor who did not pick this up despite us being upfront about our IVA? if the house was included in the IVA as you think it suggests, does it really mean that our friend & relatives could be approached for the money and face bankruptcy themselves it they cannot give the money, which is highly likely. All of the money was not used for them, some was used personally, what does this also mean with regards to ourselves?
Sorry there are so many questions, we really did not know this was required and do not know at the moment what to do.

Thanks again for your help,
Scott

[MelanieGiles]

I don't see how the conveyancing solicitor could be held to blame - it is not their duty to be aware of IVAs in the same way they would be expected to react to bankruptcy cases. If the money is no longer available, you could ask the IP to see if he is prepared to go back to creditors with a justifiable explanation as to what has happened, and maybe the money could be repaid by additional instalments.

Did you not understand your responsibilites with regard to this property when you signed the IVA proposals? Was this explained to you by your IP?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[ray_a]

This is not good!

Shouldn't the sale proceeds been advised to the IP when the house was taking oplace.

I advised ours when we did ours and he requested the money to be transferred to him, so as to clear creditors.

I suspect the house was included in the IVA because why would the IP want to register his interest.

I am afraid it is another example of IP's not properly advising those in IVA properly and adopting a somewhat carefree approach to things.

This is something on my mind as I have to sort out a variation on Friday when I would have preferred to have done mine back last February when I had more time. Basically I was not advised properly as to the correct amount required to clear.

[scottm]

Very little was explained to by our IP, and we were not aware that any proceeds of a sale would have to be paid as this was not explained. I did ask about extra payments and got the feeling that this was not an option they were prepared to discuss. I really want to talk to someone about this as both my partner and I are frightened, as we have no idea what is going to happen. You mentioned about approaching a solicitor, but we have no idea what type of solicitor to approach and also whether we are actually going to be able to pay for one. Would you suggest that I speak to the IP again about additional repayment?

[ray_a]

Hi Scott

The problem is that many Solicitors do not understand IVA's unfortunately. Geberally Solicitors when conveyancing follow your instructions which is not unreasonable!

I think you need to find the original IVA documentation which was submitted to the court and look to see how if the house was to be dealt with.

If your relatives have provided a loan outside the IVA then it could be in breach of the IVA conditions as any further borrowing has to be agreed by the IVA supervisor.

I know this is complicated but the situation is very complicated.

It can and will be sorted out so try and keep calm and try and find the paperwork and come back to us!

Good Luck

Ray

[MelanieGiles]

And it is a good idea to discuss this matter with your IP again - why not try to arrange a face to face meeting to see if you can come up with a mutually acceptable solution.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk