Hi,myself and my husband are 6 months into our second year of our i.v.a.Jointly we had £20,000 of debt.My husband is now in the process of setting up a buisness with his friend and he will be a company director.I am wondering what the implications of this are,re our i.v.a?We understand that 50% of anything he earns over what is agreed will go into the i.v.a but what about company profits?He will get a base wage and then the profits will go into an account which will stay within the company.Do the creditors get half of this also?If we choose to,could we opt out of the i.v.a and pay off our creditors after the first year of trading.We are confused as to what to do.We seemingly have been given this amazing opportunity to pay off our debts but the i.v.a just confuses the whole situation.I'm sorry if this is confusing.I am confused!
Many thanks.
He is effectively changing jobs and will need to do a new I&E. However, if he is a shareholder he will be expected to draw dividends when the company is in a position to pay them and he cannot leave the profits in the company until the IVA is over.
There are other implications if the business is taking on any debts and there are director's personal guarantees to be signed. Would it be an option for his friend to offer a full and final settlement to creditors to remove your husband from any of the restrictions of the IVA?
Thanks,that may be an option but i am not sure.There will be no debts associated with the company as my husband's friend is acting as investor.
My husbands base wage will result in roughly £35,000 per annum,about double what he is earning now.As i said before we understand that we will have to pay 50% of the extra wage into the iva.But when it is reviewed in April 2010,will they increase the payments to take ALL of the increase?
You will need to notify your IP as the whole I&E will need changed. However, normally you are only required to pay 50% of the increase in salary after allowing for increased costs of living. This gives an incentive to find better paid work and also improve the dividend to creditors at the same time. Your IP will be able to tell you what exactly the terms of your proposal would mean.
I will have to contact our ip about all this,i just wanted to get a few things straight before we did that.
If my husbands business partner would be willing to put up the cash to release us from the i.v.a,how would we go about it?Would we have to give 100% of debt owed plus interest or would it be the amount agreed when the i.v.a was first set up?
Also,we currently live in a two bed flat with an 8 month old.A bigger house is definitely needed,with a garden.Would we be able to use the increase in wages to fund this?Would this be considered a reasonable increase in our cost of living?
If your husband's new business partner was prepared to offer enough to achieve the original dividend on offer your creditors may be happy to accept this. The new venture is not guaranteed so your creditors may be happy to close the file and let you get on with your lives.
There is no problem moving to a larger property but creditors may want you to use your share of the increased wages to fund the extra rent payments. The increased running costs could be allowed as cost of living increases. Again only your own IP could give a definite answer as it does depend on the individual terms of each proposal.
Should i get in touch with my IP and ask how much is remaining to repay to our creditors including a list of individual amounts?Then we can go to my husbands business partner with an exact amount.Would it in any way be in his best interests to help us out?I don't know if he would do so out of the goodness of his heart!
I can't seem to find my original proposal to remind myself of the original amount.[:(!]
Ask your IP for the amount needed to achieve the original dividend which will take into account any fee reductions due to the reduced timeframe.
As to the new business partner, it would be in his interests as your husband's name would be removed from the insolvency service website which some companies are known to check. In addition, if your IVAs failed at some stage in the future you could be made bankrupt and if your husband was a director or shareholder this could cause problems for the company. Finally, if there was to be any expansion and finance was required to do this, your husband would not need to obtain anyone's consent to sign personal guarantees or loan documents.
If he is to be an employee it would not be too much of an issue other than between yourselves and your IP.
