www.iva.co.uk

Hi
I wonder if anybone would be able to advise on this situation? I'll try and keep it simple.
Person A and person B were married for a number of years and owned a house together as well as a joint secured loan, a joint unsecured loan and a few debts in individual names.
They divorced 3 years ago and person A straight away entered an IVA without declaring the joint unsecured loan as person B was paying it.
This year person B is going bankrupt due to a change in circumstances and can't service their individual debt any longer.
What would happen to person A's IVA? Would it fail after 3 years due to the non-disclosure of the loan? (a sizeable loan which would have been the main creditor in the IVA)

Many thanks

Hi Jenny,

I think that Person A needs to speak to the IP as soon as possible about this as it should have been included from day one.

Exactly what difference it will make I have no idea as they will become liable for the whole amount.

It may cause the iva to fail if its a significant part of the total debt. This needs to be discussed with the ip right away who will have specific case details.
Why was the debt not disclosed at the start?

Paul

Hi Jenny.81 - I echo the other - Person A needs to address this urgently with their IP. It may not have been disclosed due to not understanding that they would also be liable as it was being paid in full, either way it is down to the IP to see what they can do.

Keep us posted as to how things progress.

Regards,

Thanks guys.
It wasn't disclosed as they didn't want another creditor on their IVA and they didn't see the point as the other person was paying it in full.
The outstanding amount of the missing loan as at this month, is roughly the same as the total of the other debts included at the start of the IVA

Person A definitely needs to speak to IP as soon as possible.

Who suggested leaving the loan out?

Paul

It should have been listed as a creditor at the start of the IVA and the debt would have received dividends. To leave out a debt so big is material and cannot be deemed an honest omission.

I don't think it was an honest omission - they just didn't want it including. I *think* (but couldn't swear to it) that the IVA administrators are aware of it as it was mentioned in a conversation to me about 2 years ago that they may have to include this loan (and the individual then wanted person B to refund person A the addittional payment as they didn't think it was fair that person B was getting the loan paid for without making full monthly contributions which is what had been agreed at seperation. Nothing has been heard since though, but the only payments coming off the loan balance are the amounts that person B is paying (full contractual amounts)

I did wonder whether an iva introducer may have made the suggestion!

Paul

Even if the debt was being paid it had to be listed because the debt was there at the time. The fact that inclusion of the debt could have meant a reduction in the term of repayment is really irrelevant as person A would be unaffected either way.