Individual Voluntary Arrangement or IVA has always been a familiar name to those who have rescued themselves from a huge burden of debts. You can minimize debt tantrums and pay off it with slow and consistent repayment instalments with IVA. You can write off all your unsecured debts for a lifetime through an IVA proposal.
For filing an IVA application, you have to take assistance from an Insolvency Practitioner. The duty of an Insolvency Practitioner is to represent your financial interests and details, to all your creditors. And, you have to introduce your assets, bank details and every finances detail to the Insolvency Practitioner. If you’re thinking about hiding money from IVA and your IP, then you should get to know about the consequences, at least once.
Hiding Money from IVA: Is it Legal?
Once you agree for an IVA you’re entering into a commitment of repaying the debt with monthly or lump sum IVA instalments. IVA is a consent signed between you and the creditors. You are allowed to make the payment to the Insolvency Practitioner at the end of the month. Don’t worry; you can spend general everyday costs to lead your life normally.
The completion period of an IVA can differ from person to person and the amount of the instalments. But, most of the IVAs, if maintained carefully, then can be cleared off within six years. Once you are done with the final payment, the debt will be written off.
Meanwhile, the appointed Insolvency Practitioner will always be there to keep the track of your financial woes. The practitioner would review if the instalments justify the income and your finances. Additionally, the expert would decide how much you should pay the creditor as your IVA settlement policy.
Now, if you plan to hide money from IVA Insolvency Practitioners, then you are endangering your own financial conditions. The true financial condition of yours can be easily reflected on the payslips and bank records that you have to hand over to the practitioner. That’s because of deciding the IVA proposal for the creditors and court proceedings.
If you hide anything, then you can easily get caught red-handed. And, you would miss the IVA opportunity, and the next consequences can be bankruptcy. Hiding finances from IVA is nothing less than fraudulent.
Why is Hiding Money from IVA, not a Wise Idea?
Your IVA scheme and payments are to be decided basically upon what you earn. The creditors would definitely eye on your payslips and banking details. They and the Insolvency Practitioner, gain the right to sneak through your financial details, once you have applied for IVA.
Additionally, you should not hide your assets and inheritance from IVA. The IP has to look after your financial situation, and then talk to your creditors on your behalf. Moreover, he or she is the one who can offer suitable debt advice to you. If you lie to the Insolvency Practitioner, then he or she is not liable to defend you anymore.
In addition to hiding assets from IVA, if you decide not to inform your IP about the extra earnings it can lead you to bankruptcy. Besides this, you can lose that money, too.
Exact Consequences of Hiding Money from IVA
Your IVA scheme is monitored by the creditors and overall, the court. If you keep any monetary affairs or cash-in-flow a secret, then you are forced to address directly to the court. And, the court might put you behind the bars.
Apart from this, if they seize your assets, it is nothing to be surprised about. After you step in the shoes of IVA, you have to show all your finances and banking details. It’s in your IVA agreement, and if you don’t keep up with that, then bankruptcy is the only key to pay off your debt. You would lose all your money, as well as assets.
If You Skip Payments for IVA
The weak point of Individual Voluntary Arrangement is that you have to pay the installments every month. If you fail to pay a single installment or pay less than what is decided, then it would impose a failure on your IVA. The creditors might not grant the IVA contract any more. Most importantly, they can take strict actions against you.
Apart from the payment dilemmas to the creditors, you have to pay a certain amount of money to your IP as per fees. In case, you fail your IVA, the IP can enforce bankruptcy on you. Otherwise, the creditors would do that, anyway. Therefore, you have to keep paying the minimum amount besides not hiding money from IVA.
What if Your Pay Increases?
This question is frequently asked by the debtors regarding hiding money from IVA. If you have encountered a hike in your salary and that’s permanent, then the first thing that you should do is, inform your Insolvency Practitioner. Then, the expert would decide whether your IVA installment should increase or not.
However, this is not always necessary that you have to pay more towards your IVA, once your pay rises. The Insolvency Practitioner would sneak into your monthly expenses, and he or she won’t interrupt your general costs. So, if the outgoings have increased, as well, then the IVA payments might remain the same.
When it comes to the pension scheme, then you have to inform your IP. Your pension is a kind of earnings, too. And, you can’t keep any monetary secret when you are struggling with debts and IVA. Therefore, contact the IP as a responsible debtor.
Windfall Clause of IVA
A windfall is detected as an unpredicted cash flow to your account, such as if you have inherited money or assets or won a lottery, while the IVA is still active on your name. And, you have to inform your IP about that. The Insolvency Practitioner would look into what you have inherited or won, and decide the repayment policy again.
Hiding windfall cases from your IVA or IP would have the same results as hiding money from IVA. In case, the amount you have received weighs greater than the left-over debt, then you are liable to pay off the debt fully. Additionally, the IP would add his or her fees along with the interest on the remaining debt. However, if your windfall doesn’t reach £500, then it won’t be included under the clauses of your IVA.
Will you Lose your Car through an IVA?
Signing up for an IVA might not necessarily snatch away your car. Individual Voluntary Arrangement would spare you with the essential earnings and conveyance you need. If you use your car for reaching your workspace every day, then it will not be touched by the creditors, or the court. However, the car’s value should not be too expensive for an individual who has applied for an IVA.
Confused about Handing over Banking Details to Creditors and IP?
Well, you have to provide equivalent banking details and payslips to the IP and the creditors. And, that’s necessary before committing to IVA. If you doubt the financial security of this procedure, then you can ask the IP how long they would keep your banking details. Additionally, you can ask the IP if anyone can access them. Moreover, you should check if the IVA provider is either FCA-authorized or not.
Points to Remember…
IVA is designed to make you go debt-free and you have to pay a fraction of the total debt. As you’re already struggling with the entire debt and the surging interest rate. Hiding money from IVA would fail the entire process and you might have to face bankruptcy along with losing all your assets. Therefore, don’t hide any monetary clauses from your IP for a hassle-free IVA and stress-free future.