I have an IVA which has been running for its first year. Very difficult with monthly payments of £750. My concern is that I have been running a small construction company and I am struggling. If the business fails I have some personal guarantees given on a van lease and a £14k business loan. How would these affect my IVA ? Would they be added ? Would My IVA then fail ? I am so worried.
Hi Steve. I assume that the business you run is limited and any PGs given will have been listed on your IVA as contingent liabilities so you covered. However, if the business fails you may not have any income so the IVA would be doomed to failure unless you can find another source of income.
If the company goes bust the contingent creditors will become unsecured like the others listed in the proposal and you may have to make some additional payments if a minimum dividend was guaranteed. Your IVA payments may need to be reduced from their current level so your IP may have to call a variation anyway.
This makes it a little more tricky as effectively you created a new liability post IVA approval. It could mean that you obtained credit without the consent of the Supervisor and he/she may be obliged to issue bankruptcy proceedings against you or at least call another meeting of creditors to ask for their views. It does seem strange that the IVA was not noticed when you signed the PGs as no doubt the creditor would have run a credit check. Your PGs are in effect pretty worthless as you are insolvent and you should urgently speak to your IP and explain that you did not realise that a PG was credit and potentially a breach of your IVA.
If there were other directors it is likely that the creditors will pursue those with the most assets but you should inform your IP quickly before it comes to light in another way. I accept what you say about the company and it's credit check but it seems strange that they did not do a check on you as the PGs are pretty worthless if the guarantor is aLready insolvent and subject to an IVA.
This should have been disclosed to your IP Steve, and the resultant debts will not be able to be included in the existing IVA without the consent of the IVA creditors and the company creditors - which I feel may be unlikely.
