What impact will repossession have on my IVA?

[david.12]

I have an IVA that is two years into a five year plan with debts totalling £60K, my house has just been repossessed and I will owe upwards of £50K following the sale. What impact will this have on my IVA?

[Viki.W]

Hey david, welcome to the forum, sorry about your house, did your IP know about this? Please wait for an expert to advise you. Viki X

[pbeck]

The shortfall on sale of your property will be added to the debts to be settled in your IVA, this will dilute the dividend payable to all the other creditors.

If you are required to achieve a minimum dividend in your IVA either as part of the original proposal or through a modification put forward at the creditors' meeting, then either a further meeting will have to be called to see whether the creditors will accept a diluted dividend, or you will have to increase your payments or the length of the IVA to achieve the required dividend.

If a variation meeting is called, creditors will, in addition to considering the financial outcome, consider the extent to which you have complied with the terms of the IVA to date, and whether you are to any extent responsible for the shortfall on repossession or a just a victim of fate before deciding which way to vote.

Your best bet is to talk to your IP to see whether this will apply, and if so, what they recommend doing about it. Your IP won't want to fail the IVA if they can see a way by which the creditors will accept the situation.

[Adam Davies]

Hi
Let your IP know as soon as possible.
You may find that under the circumstances bankruptcy may be a better option for you
Regards

[indebtforever]

i would think it will be hard to get any creditors to accept a variation to include an extra 50k unless you can make much greater payments into the iva over a longer term[:0]

[Adam Davies]

Hi
I agree

[MelanieGiles]

I am not convinced that the debt would necessarily be bound by the IVA, as if there was no shortfall at the outset of the IVA the provision about including non-circulated creditors may not necessarily apply.

If you are losing your house anywayt, is bankruptcy not a better option now to draw a line under things and move on?

[david.12]

Thanks for all your responses. My situation is that I do have a decent income and can afford my IVA and if I'm honest which of course I am, I could afford to pay a bit more. My dilemma is that the amount I could afford to pay extra each month would not be what the mortgage lender would want and with three years left on my IVA and only 8 years left to retirement I don't really want to be paying out of my pension. So is bankruptcy an option when you have a decent income (£30K)

[MelanieGiles]

Bankruptcy is always an option if you have debts that you cannot repay.