The IVA agreement will be bound to say that no credit during the IVA is permissible without the agreement of your IP. So the technical expert answer is to say that the IVA will be in default as a result of this unauthorised loan.
So I will now look at this if I were acting as your IP. There will obviously be some element of undertanding, if the money was borrowed to pay for essential items for the baby, rather than paying an associate creditor (your mother-in-law) back or paying for Christmas. The latter two items are unlikely to be met with much sympathy to be frank.
Secondly, I would ask you to find out if there is a friend or family member who could lend you the money on an informal basis, to be repaid as soon as the IVA has completed.
And generally, I would look to see whether I could justify providing retrospective agreement to the loan. This would only be for very good reasons, and I would probably need you to extend the term of your IVA to take account the value of the loan repayments you have made, at the expense of the other creditors.
So nothing is therefore impossible, but please learn lessons from this if you intend to keep your IVA going - which may be difficult with a young child now in any case. Although we, as IPs, all have families of our own, borrowing money to fund Christmas spending is never a good idea - insolvent or not.
Regards, Melanie Giles, Insolvency Practitioner
