Disadvantages of an IVA according to this site

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wakeywakey
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by wakeywakey » Tue Jun 20, 2017 12:46 pm
On the first page of this site, the following is stated:-

What are the disadvantages of an IVA?

Legally Binding Agreement - As an IVA is legally binding, should the debtor break any of the terms (such as not keeping up with the repayments), the IVA will fail, and the creditors may petition for bankruptcy. Any money paid into the IVA will be lost.

What exactly does this mean?
Your not saying that ALL your payments will be lost as in not paid to creditors are you?
Surely the payments will still have come off the debt?

Think maybe I am missing something again here?
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Michael Peoples
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by Michael Peoples » Tue Jun 20, 2017 1:39 pm
If you fail the IVA you will not get a refund. Any money paid in will go on fees, costs and distributions to creditors and interest/charges will restart. While any money credited to the accounts will come off the balances this could be easily offset by the interest and charges starting again.
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kallis3
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by kallis3 » Tue Jun 20, 2017 1:43 pm
I agree with Michael and was just about to post that but for some reason my reply disappeared!!
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Lisa Thomas
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by Lisa Thomas » Tue Jun 20, 2017 3:12 pm
The wording is a bit misleading. Any monies paid in will usually be dissipated and effectively nothing available to be returned to the debtor.
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Foggy
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by Foggy » Tue Jun 20, 2017 4:03 pm
Effectively, you will be back to square one and the debts might have grown ... the moral is "Do not let the IVA fail" .
redboxtree
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by redboxtree » Tue Jun 20, 2017 6:36 pm
As an IVA is one step away from bankruptcy any monies you pay is only a reflection of the partial debt.

You have to remember that if you succeed in theory a large part of your debt could be written off at the end unless it looks like you are heading towards paying back 100p in the £ plus interest plus other charges.
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