What does this mean - Legally Binding Agreement?

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luc
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by luc » Tue Sep 26, 2017 5:31 am
What does this mean?
Legally Binding Agreement - As it 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
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Foggy
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by Foggy » Tue Sep 26, 2017 7:04 am
The IVA agreement is a contract and it MUST be adhered to, by all sides. The threat of bankruptcy added at the end of that statement isn't a certain outcome --- the word "can" doesn't mean they "will". You must be honest in your dealings with the IP and creditors .... hiding assets, for instance, is fraud.
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Keith White
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by Keith White » Tue Sep 26, 2017 7:34 am
Foggy is of course correct. But people entering an IVA can be concerned that somehow they are legally bound to continue making payments even if their circumstances change significantly. Eg someone in an IVA is made redundant (no one can predict what 5 years will bring!). Very often under such circumstances, Insolvency Practitioners will allow a payment break in the short-term. But debtors cannot be forced to maintain payments if they are simply unaffordable. And in such circumstances the IVA may fail, and other debt solutions - bankruptcy or a repayment plan of some sort - may well be necessary.
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Foggy
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by Foggy » Tue Sep 26, 2017 8:03 am
Expanding in Keith's reply: Cicumstances can and will change over the course of an arrangement. There are certain remedies built in to the terms to accomodate many changes as well as an amount of discretion given to the IP. Communication is key ... discuss changes with your case worker / IP rather than bottle them up and worry over them. Work with your IP, not against him / her, and most changes can be accomodated with a little give and take.
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Lisa Thomas
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by Lisa Thomas » Tue Sep 26, 2017 10:05 am
Also consider that the creditors are also legally bound by it, if approved. This means they cannot take steps to enforce their pre IVA debts whilst it is in place.
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watzki
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by watzki » Tue Sep 26, 2017 6:56 pm
I was with freeman Jones and found by been upfront and honest with them our IVA basically past without many hiccups.
Mind you they tried to say I owed them circa £4500 in arrears in the last six months but after challenging them and a few phone calls it was only £836
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