www.iva.co.uk

hi i am in a joint iva with my wife,we fell behind with the monthly payments and had nooption than to request an extension to the term ,which wasrefused .however it was agreed that an increase in the monthly payments up would be ok increasing the monthly payment by 200pm. im self employed and since this agreement in octlast year my earnings have decreased so paying even the original monthly amount is unfeasible. when we entered the iva in jan 06 we were home owners but had the mortgage excluded from the iva as we felt we could manage it however in 2007 it became clear that when we came off our fixed rate term that the payments wouldnt be managable so we chose to sell the house while we could. we informed our ip that this was our intention and they didnt seem massively interested after we had sold we informed them of our new address for communication explained that the house was now sold is there anything we need to do with regards to the iva as a reusult of this and were met with nothing but apathy from them. now the iva was for 47000 intotal though only 1500 was in my name and a 2500 overdraft was in joint names every thing else (over 42000)was in my wifes name. we are now seriously cosidering failing the iva so that my wife can go bankrupt .however after some in initial advice we are worried about the implications of our house having been sold during the iva and the funds not having been introduced to the iva ( they were used to repay 7000 to my dad who tried to help before we entered the iva to pay 2500 of arrears onthe iva and to pay in advance an initial lease on a car as i am a driving instructor so that i had a future line of credit open for a work vehicle as the cost of the driving school iwas with at the time was crippling and leaving them was to free up income to continue paying the iva)so before we initiate any proceedings, we need to to find out where we stand in regards to this situation ,any advice you can offerwould be hugely appreciated

Hi and welcome.

I am not 100% sure about the house, but I believe that if you went bankrupt, the OR would not look too kindly on the fact that you used this money to prefer one of your creditors over the rest.

One of the professional experts will be along shortly to give you some advice.

I think you need to speak to your IP as well and put him in the picture.

If you are not sure of his direct email address, you can find it here:

http://www.insolvency-service.co.uk/newipsearch.htm

This is a pickle - first of all you could not have treated your mortgage as an unsecured creditor in the IVA, as it is covered by the value of your house.

Secondly, it was not right to pay off a family debt out of the sale proceeds of your house, unless that debt had been incurred since the IVA was agreed and the property was specifically excluded from the IVA. Was this the case?

Could you paragraph your reply please - as I found it very difficult to read with no breaks.