Hi. I'm hoping I can get a bit of advice about a failed IVA. I put my hands up and admit this is my own doing (ive been foolishly spending money I should have gave my IP just to impress a GF. Now ex) but its almost certain my IVA will fail when my IP ask for my payslips and p60 later this year. My question is, will I be able to get a DMP if this happens and will I be charged interest again? (standard 8% per year) Also will my IVA company charge me for their services because its failed? I am a home owner so will they make me go bankrupt against my will? Any info on this would be appreciated. Thank you. PS my debts were £29000 but still about £16000 to pay
If the IVA fails ( which is not a 'done deal') a DMP would be conditional on the creditors accepting it, some may agree to reduced payments, some may freeze interest, others may leave interest running at the loans contractual rate, not at 8%. To be honest, having the IVA failk on them might make them less sympathetic.
Regarding the potential for bankruptcy -- some IVA's have bankruptcy written into the terms that BR will follow failure, so you need to check your agreed terms. Being a homeowner makes BR a more attractive prospect for creditors, but costs in BR are much higher than in the IVA, so it isn't always the preferred action.
As I mentioned -- it is not certain that failure will ensue. Your IP will require the 'missing' payments to be made up and might agree for this to be made by extending the term to cover these 'arrears', or might accept a number of extra payments to chip away at the 'arrears' -- to be funded by eating beans for a while or sacrificing future shares of overtime payments.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
It might be possible to agree an extension to catch up with the arrears.
Check your proposals as your IP might be forced to Bankrupt you if the IVA fails, it depends on what terms you agreed to.
As Foggy says the 8% interest applies when there are enough funds to pay creditors interest for the post IVA period. If the IVA fails creditors will charge you the contractual rate of interest which could be higher than 8% in some cases.
