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iva advice please

(6 Posts)
BallerinaBetty Tue 13-Sep-11 14:17:17

Hi this is my first time posting so I hope I get it right!

A very good friend of mine has an IVA with her dh. They had a lot of debt, struggling to make minimum payments etc so felt this was best route for them. They've been managing to keep the payments and everything is on track. Recently a relative of my friend died and she received a modest lump sum. She also inherited a sixth of a house - the rest is owned by her mum and sister. This house is rented out and so she is now receiving her sixth of rental income.

My friend wants to declare all this to the IVA people - she says its in the agreement that she must tell them. Her dh sees this as an opportunity for them to have a bit of money and that he will never forgive her if she takes this away from them. She is really scared that they will find out and then she will end up with a criminal conviction - as well as having to repay the money. She is also worried that if she says nothing and then later on after the IVA has ended it comes out she could still be in trouble.

This stress is making her ill. She recently had her third baby and has been doing so well (has a history of depression) but she says she can't stop thinking about all of this and worrying about the implications. Her mum knows about the IVA but her sister doesnt - presumably an attachment would be placed on the house so that if it was sold my friend would have to hand over her share to pay her debt but that shouldnt affect her mum and sister should it?

I'm sorry to go on a bit but I really don't know what to say to her. She doesnt want to fall out with her dh - but she can't go on like this. Does anyone have any advice or knowledge about the implications if she doesnt own up?

5inthebed Tue 13-Sep-11 14:33:48

She has to declare it to the IVA people I'm afraid. They may only request half of it as it may be classed as a bonus, rather that a salary.

If she does not declare it and the IVA company find out then they would be forced to declare themselves bankrupt as is stated in an IVA agreement.

Totally sucks, but they know this is the case.

MrsTittleMouse Tue 13-Sep-11 14:42:28

She is right, it almost certainly says in her agreement that she needs to declare this money. See this link:

images2.moneysavingexpert.com/attachment/ivaGuide.pdf

She really is stuck between a rock and a hard place isn't she? sad From what I can find on the internet, if she spends her windfall instead of declaring it then the IVA will fail, she'll be made bankrupt, and she'll lose the share of the house (and any other assets) anyway. sad

I can understand why her husband is annoyed that they won't get to keep the money, but he is being completely unreasonable. She isn't really "taking it away from them". It always belonged to the creditors and they are technically stealing by keeping it. She is completely in the right.

I don't know how she is going to change his mind though. sad

BallerinaBetty Tue 13-Sep-11 15:18:38

Thank you for your replies. Yes that is what I thought - but didnt know that there's a possiblity she might be able to keep some of it so will tell her.

I don't know how she's going to change her husband's mind I really don't. Seems like whatever she does she's going to be stressed. Personally I'd rather do the right thing and be stressed.

He just seems stuck on this idea that they don't have to say anything because the IVA people will never find out, but both myself and her think there is every possibility they will find out. Hmmm.

5inthebed Tue 13-Sep-11 16:51:34

The only way they would not find out would be if they got the rent money in hand and it never entered their bank account.

I had a thought earlier, the IVA company may request they sell their 6th of the house to pay off their debt, not sure if they could force it though as shared 6 ways.

BallerinaBetty Tue 13-Sep-11 18:06:06

I think her dh has got complacent because the IVA company have never checked their bank statements - but I think it is only a matter of time.

I think if they were forced to sell the house her mum would buy her out. I think my friend would rather have an attachment against the house for the term of the IVA and then declare the rent income, so that in years to come they do have something if you see what I mean.

Will be having a chat with her tomorrow - perhaps if her dh realises about bankruptcy he might change his mind.

Thank you for replies it does help.

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