Do i have to give my house equity - part of divorce settlement into IVA?

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christe
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by christe » Wed Mar 21, 2018 5:47 pm
Hello,
My current wife and I took out a joint IVA in August 2014 as we both had debts totaling £63,000. I have some equity in a property which is now owned by my ex-wife and part of the divorce settlement was that I should receive £20,000. I agreed that if I get this money I would pay it into the IVA to reduce the debt owed. Since starting the IVA we have been consistently paying and have not missed a payment.

Recently I queried the outstanding figure and was told that the balance is around £30,000. I was not in agreement with this so decided to contact some of my creditors, one of which is HMRC. Initially the debt to them was £15,000 and when i contacted them, they confirmed that there is nothing outstanding. This has been confirmed in writing and I have forwarded this to the IVA via email. Since then I have received phone calls from them demanding the £20,000 I promised as the creditors are expecting this. I informed them that if HMRC are not owed anything then the balance figure will be different which would mean £30,000 is not owed. I am now having to contact my creditors to get a more accurate balance figure.

My IVA company have told me that if I do not pay them the £20,000 then they may consult my creditors and dissolve the IVA and all the payments already made would not count for anything. I was under the impression that the IVA company were supposed to be acting on my behalf and in my best interest, i.e contacting the creditors and making payments and liaising on my behalf. At the moment I feel harassed just I like I felt before taking out the IVA.

Please can you advise me.

Kind regards,

Christe
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Foggy
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by Foggy » Wed Mar 21, 2018 6:15 pm
Hi. First of all any balance figures given by a creditor other than the official claim to the IP are meaningless. In the case of HMRC they have a dedicated unit which deals with IVA payments. Your old account with them has been closed and the IVA payments are due to go to a new account set up specifically for them. This is their way of accounting and does not mean the debt is not still owing. If the IVA fails HMRC will be among the first to start chasing you as you still owe them the money.

You agreed to pay the money from the property and failure to do so will see the IVA terminated and you will be back to square one with your creditors. Anything you have paid so far will go to fees and any left over will be overshadowed by the addition of lost interest and late payment charges.

To cover the full debt, fees and statutory interest would take , on a £63k debt, in the region of £95k
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luluj
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by luluj » Thu Mar 22, 2018 2:06 am
I can understand your concern however as foggy has explained your IVA was agreed based on the additional £20,000 being paid in.
You always owe the full amount of debt plus IP fees and statutory interest abd only when 100% of that is received will there be money left for you to retain.
Don't let your iva fail on something you agreed to at the outset.
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Lisa Thomas
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by Lisa Thomas » Thu Mar 22, 2018 9:21 am
Were the debts of £63k joint?

Even if you deduct the HMRC claim, which sounds odd that they say nothing is due, you will still have enough debts, interest, costs for the £20k to be due over.

If it transpired that the entire £20k wasn't needed at you have hit 100p/£ plus interest plus costs then the surplus would be returned to you, but based on the figures provided I suspect this is unlikely.
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