IVA company asking for extra amount & extension at the end of IVA

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by debbie157 » Wed Jun 21, 2017 10:49 am
My IVA is due to end its 5 year period in September, during the period of April 2015 to April 2016 I had started a new business venture and was self employed, the business is now limited. during that time I didn't draw any profit from the business account, my IVA company were aware of this and just asked me to send over proof that a wage wasn't drawn, I sent all bank statements covering the period and also had a letter sent from my accountant confirming that no wage was drawn, all was ok till this week (three months before then end) they have now said that I owe them an extra £2,900 from the period of 2015 - 2016, that needs to be paid in full, or I have to continue my IVA for another 19 months to clear it. how can this be right when they have had all information asked for, I have never missed or made a late payment, always sent wage slips and monthly budget forms as requested, do I have the right to complain and fight this? all was ok during the period and they could see that our monthly payment to them was all we could afford. any help would be great, thanks.
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by Foggy » Wed Jun 21, 2017 10:53 am
The IP was presumably, waiting to see the company accounts -- although you didn't draw a wage he can't allow funds over and above working capital to be removed from creditor's reach by leaving them sat in a company's coffers. For him to come up with these figures there must be around £6k balance in the company account. If not, ask him to explain his reasoning and his calculations.
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by redboxtree » Wed Jun 21, 2017 12:00 pm
Foggy is right - but this has to be based on the audited accounts, what has been determined in terms of corporation tax and your ability to pay that by the required deadline.

An IP cannot unilaterally make such a payment extension without your agreement and the agreement of your creditors plus you also need assurance about what terms you are expected to comply to as the IVA will still be in place - is this just repayment or will you still be subject to annual reviews, windfall clauses etc.

I run my own business and know that cash flow does not always match what the accounts state and that they are effectively a snapshot at a given period in time.
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Lisa Thomas
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by Lisa Thomas » Wed Jun 21, 2017 1:50 pm
How have they arrived at the figure of £2,900?
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by redboxtree » Wed Jun 21, 2017 2:50 pm
Also see https://www.insolvencydirect.bis.gov.uk ... apter1.htm. and specifically section 12.

Extension of any IVA past that agreed requires the permission of creditors because effectively they bear the cost of the continued involvement of the IP and their term of office.

As this is still on the Insolvency Service web site I assume it is still valid as an interpretation.
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