Can I pay my boyfriend back before entering an IVA?

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by j » Tue May 15, 2018 6:05 am
I owe my boyfriend about £3000. He desperately needs the money or he risks getting into debt himself and as he is self-employed this is even more of an issue. I am currently talking to a couple of charities and companoes about possibly getting an IVA as I am using more than my salary every month to pay living expenses and debts. I have never defaulted on any of my payments but I have used my overdraft quite often to ensure they're all paid. Will my application for an IVA be rejected if I use my overdraft to pay him back just before I apply?? If o wasn't applying for an IVA I would just give him the money back from my credit and let my overdraft swallow the shortfall bit does this count as trying to defraud my creditors before claiming I can't pay it, even though I can't??
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by Foggy » Tue May 15, 2018 6:38 am
Your IP will want to see bank statements during the application process and might ask where this cash has suddenly gone. Creditors will not take kindly to an associated creditor (your boyfriend) being paid before them. Tread carefully.
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Lisa Thomas
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by Lisa Thomas » Tue May 15, 2018 8:23 am
This is classed as a 'preference'. In your IVA you will have to sign to say there have been no transactions that could be pursued in Bankruptcy - such a preference could be pursued in Bankruptcy.

You should not pay him back. Also where are the funds coming from? Savings? These would be an asset of your IVA.

In any event as Foggy points out the IP may wish to see your Bank statements and challenge the transaction/s and/or if it comes to light at a later date post IVA you are at risk of your IVA failing.
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