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We are hoping to propose an IVA giving creditors a return of approx 41p. A protection premium on a secured loan we have may also be included in 2 years provided we have not claimed on it in the meantime adding another £8000 to our creditors making a return of about 51p. Do we have to offer this to the creditors or keep the option of paying it into the secured loan thereby reducing it. If our IVA proposal is not accepted we will have to go bankrupt as a DMP would take at least 15 years to pay off our debts. Actually bankruptcy would probably be the "cheaper" option as because of the secured loan we have no equity in our house but by trying for an IVA we are offering as much as we can to the creditors. If it does come to bankruptcy would we have to pay this £8000 premium we get in 2 years to the official receiver. Sorry for rambling on but any advice would be appreciated.

Hi sps

You will need to check the exact terms of the agreement with regard to this refunded premium, however my gut feeling is that this will be a "windfall" within the IVA and will have to be handed over the the Supervisor.

Your IP should not provide for this as a potential reciept, however, as you may need to claim on the policy within the next two years and there is therefore some risk that it may not eventually be available. If it is, that is a nice bonus for your creditors.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Thanks for your reply Melanie

If it comes to bankruptcy (hopefully not) would we have to hand this £8000 over if we get it in 2 years time. Is it regarded as an asset?

Hi sps

No - with bankruptcy the "after acquired" assets provisions only last until you are discharged. This generally happens after one year.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Thanks Melanie
Just goes to show every cloud has a silver lining, if it came to bankruptcy. Hopefully we will be able to do an IVA although bankruptcy does not seem quite so scary from all the information I have gained from this site. With a family my main concern was losing the house but with no equity this shouldn't happen.