www.iva.co.uk

Hi

Our IVA should have finished this month but because we were unable to raise the equity and also because we took a 4 month payment break our IVA has been extended to October 2012.

We received our annual creditors report today and I am a bit worried by it. Our dividend has now gone down from 58p in the £ to 36p in the £ and this lower amount was what would have been realised from bankruptcy had they made us bankrupt 5 years ago.

The letter with the report stated that the IP was holding £3K to cover bankruptcy costs in the event that the creditors decide to make us bankrupt. This worried me because we have paid every month for the last 5 years and the thought that after 5 years of misery that they could still make us bankrupt scared me. Is it normal practice for IP's to do this or should I be worried.

Thank you

Dont worry about it,as you have complied with the IVA throughout,just maintain the payments and dont fret about the dividend to creditors.

The BR figure is an estimate anyway and would much likely have been far lower than is being suggested so creditors will be happy to get the 36p/£(which is a good rate of return for them).

Paul

Yes it is normal for IPs to retain monies to cover the costs of making you bankrupt if you default on the terms of the arrangement, but these days this only happens if creditors specifically request it as the IVA protocol does not include automatic bankuptcy provisions on failure. At the end of the IVA if the bankrutpcy fund has not been needed, it is distributed to creditors.