www.iva.co.uk

Hi, can i just clarify if my entire debt was say £20k but IVA over the five years was for £13,000 is £13k classed as my debt or still the £20K until the IVA has run its course. Incidentally, if I were to go Bankrupt is the bankruptcy for £13k or £20k

Mikey

Hi Mikey,

You will always owe the full amount until the end of the IVA, when whatever is left will be written off.

If you were to go bankrupt, it would be for the full amount.

The debt is not written off in an IVA until the end, so if you had the means to pay back the 20k before the 5 years was up, eg a lottery win, big pay increase etc, then that is what you would have to do, with the benefit of full protection from your creditors, guaranteed interest freeze etc.

With a BR then you go BR for the full amount also.

Regards.

Glad that I got it right Mike!

Well Done Jan, gold star in the post

Is that right - you're completely back to square one? So if you've paid £10k of which £6k went to the creditors at the point at which the IVA fails does your debt not reduce by £4k?

The creditors can put all interest and charges back on, and I imagine a lot of them do, so anything that you have paid across will either be swallowed up by the IP's fees or the creditors charges.

With IP fees now generally at only 15% of realisations, it would be unlikely for your money to have been entirely absorbed by costs. Even if the IVA fails, there should be some monies to repatriate to creditors and therefore the balances should have reduced a little.