Hi there. I have completed 2 years of my IVA. However, during the review this year, my IP advised that I have breached the agreement as the debt has increased beyond the threshold agreed. I hvae not incurred any more debt but it appears that the IP didn't get all creditors on board at the beginning. In addition, according to the debt schedule very few if any of the outstanding totals have reduced at all and in fact some have increased. The latest creditors meeting has been adjourned to consider my IP's proposal that the IVA be extended for an extra year.Any advice would be so welcome.
If the liabilities have come in higher than listed this can be a breach. What you need to find out is why this happened. Have new creditors been included or were the original estimates way under? It is inlikely that creditors will ask for the IVA to be failed as a result but an extension would seem likely to achieve the original dividend.
Best of luck for the meeting. If you can achieve the same dividend through an extension and haven't done anything wrong, then you should have a high chance of this being accepted.
Thanks for your responses. I guess my point is that I have been religiously paying the agreed amount for 2 years and yet suddenly on the 3rd year the amount outstanding increases. There have not to my knowledge been any additional debts advised so why has this happened. I have asked the IP for clarification but to my mind it seems to be the fault of the IP.
If it is the fault of the IP you should not be penalised. However, it is your proposal which you signed and if the debts listed have incorrect balances it is easily as much your fault as the IP.
Thanks Michael. the IP did all of the contact with the creditors and compiled the balances himself. I had to trust his professional abilities there. I have written him a letter to find out the actual reasons so will advise when I hear back.
Hope it sorts itself out for you. If the increase has not been too huge you could ask the IP to ensure that the extension is only put in place if creditors do not receive the agreed dividend within a five year timeframe. This would mean that if due to overtime, bonuses, equity etc your creditors got the original dividend within 60 months there would be no need for an extension.
