Had to pay the iva company to remove restriction on my property after bankruptcy

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nigel103
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by nigel103 » Tue Aug 29, 2017 4:54 pm
i had a iva, but it failed, so i went down the route of bankrupty, i keep my house / mortgage, i wanted to sell my house but found out there was a restriction on my property left on from the iva, so i had to pay the the proceeds to the iva company to get the restriction removed so the sale would go through, is this correct as i went bankrupt, thanks
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Foggy
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by Foggy » Tue Aug 29, 2017 5:19 pm
Hi Nigel. The house would have been an asset of the IVA but should, I would have thought, been released when the IVA failed. Unfortunately our industry experts will not probably see this until tomorrow, so I hope you can get an informed reply then.
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Lisa Thomas
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by Lisa Thomas » Wed Aug 30, 2017 8:19 am
I'm not aware of any legal position as to who has to pay but if there are no funds in the case for the O.R/Trustee to pay to have the caution removed and you have been given your property back it seems reasonable that if you want the restriction removed you would have to pay for it, plus any legal cost associated with disclaiming the Trustee's interest.

https://www.insolvencydirect.bis.gov.uk ... part_6.htm
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Michael Peoples
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by Michael Peoples » Thu Aug 31, 2017 8:03 am
You should have had legal advice about this. Usually when an IVA is terminated the 'trust' is severed but if has not happened then the property restriction would remain and the property captured by the IVA. I have seen this happen before but I would have thought the bankruptcy order would have severed the trust even if the IVA failure had not.
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nigel103
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by nigel103 » Thu Aug 31, 2017 2:31 pm
Michael Peoples wrote:
You should have had legal advice about this. Usually when an IVA is terminated the 'trust' is severed but if has not happened then the property restriction would remain and the property captured by the IVA. I have seen this happen before but I would have thought the bankruptcy order would have severed the trust even if the IVA failure had not.

is there anything i can do ???????/
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Lisa Thomas
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by Lisa Thomas » Thu Aug 31, 2017 3:31 pm
Pay the IP to remove the restriction
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Lisa Thomas
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by Lisa Thomas » Thu Aug 31, 2017 3:32 pm
Is there equity in the property? If you went Bankrupt it vests in the Trustee so they would put their own charge on it.
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Michael Peoples
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by Michael Peoples » Thu Aug 31, 2017 3:39 pm
You should speak to the former IP and ask them on what grounds the equity was captured by the IVA. If your IVA was covered by the R3 standard terms and conditions the trust survives termination but I do not think this applies to protocol IVAs. If your previous IP had petitioned for your bankruptcy this could have severed the trust but if you or another creditor raised the petition then the trust way well have continued.

Your former IP may indeed be correct but you are entitled to ask the questions. You could also consider legal advice but this could be expensive and may not be worth it depending on how much equity was released after the sale.
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Foggy
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by Foggy » Thu Aug 31, 2017 3:56 pm
Michael Peoples wrote:
You should speak to the former IP and ask them on what grounds the equity was captured by the IVA. If your IVA was covered by the R3 standard terms and conditions the trust survives termination but I do not think this applies to protocol IVAs. If your previous IP had petitioned for your bankruptcy this could have severed the trust but if you or another creditor raised the petition then the trust way well have continued.

Your former IP may indeed be correct but you are entitled to ask the questions. You could also consider legal advice but this could be expensive and may not be worth it depending on how much equity was released after the sale.



I believe that, following on from the N T Gallagher & Son Ltd [2002] case, the trust survives in Protocol cases as well. I gather this was the arguement used previously by Mel, some time ago.
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Lisa Thomas
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by Lisa Thomas » Fri Sep 01, 2017 8:17 am
Either way the property will be caught by the subsequent BKY if not still under the IVA trust.
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