Steve Thatcher
Registered User
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A normal IVA can result in payments lasting up to 5/6 years. However, a lump sum IVA, if accepted by creditors, releases the debtor immediately. The advantages are
1. No court appearance. This seems to be important to many Irish people seeking a UK solution.
2.You only have to prove COMI to your insolvency practitioner, not to a judge.
3. There is no 'year of bankruptcy.
4. Establishing your COMI takes less time.
Another advantage is that if it's turned down, preparing for an IVA is similar to preparing for bankruptcy, so you're ready to go with the bankruptcy route if the IVA doesn't work.
Anyone with cash who can move to the UK and offer it as a lump sum IVA should definitely go for it. The benefits, particularly the immediate freedom, are enormous.
Jim, I've heard that some IVAs are being rejected, which seems curious to me, especially since those creditors might get nothing if the debtor goes bankrupt. Are certain institutions less likely to go along with an IVA, or why do they get turned down?
Interesting Jim. While I am working in the banking sector I am occasionally called upon to give advice to people in financial difficulties. The difficulties I saw with PIA's are as follows:A big advantage of Irish PIA's and DSA's over UK IVA's is that you only need 65% of the creditors to vote in favour, as opposed to 75% in the UK. As a result, we have effectively stopped advising clients to go to the UK to do an IVA if we consider that an informal scheme or PIA will be successful.
Insolvency living expenses are severe, which is why the easiest PIAs to get over the line is where a family member offers a lump sum: as such a lump sum would not be available in a bankruptcy. A "lump sum" PIA means that the creditors accept the lump sum, and do not seek any contributions from income over an extended period.
PIA's/DSA's can work very well when a debtor is multi-banked, and a large creditor, with a 65% + vote, can effectively dictate what the other creditors will get (provided the other creditors cannot prove that they would get more in a bankruptcy.)
Jim Stafford
Steve,
In practice, do secured creditors usually go with IVA's in the UK?
It was my understanding that they have to opt in so this effectively gives them a veto. There would be no point proceeding with an IVA if one would have debts still remaining.
Hi Steve, I was in contact with you via this platform some weeks ago and was waiting to hear from the bank. Well, I did, and it looks like they don't want to play ball with me, so I believe I will be availing of your services and heading to London soon. The lump sum IVA debt process sounds very interesting and I'm sure I could get family members to put together the lump sum.
However am I correct in saying that I could only do this if I have sold the properties and therefore just have a residual (unsecured) debt left? It'll be €600k or so I'd imagine. There is one property which I think I could find difficult to sell, and I'd be concerned that this would ruin my chances to try the lump sum IVA route.
I spoke to a PIP and the PIA option could take 6yrs which doesn't appeal to me, as my family and I will be living on not much more than a pittance for all that time as most of my monthly salary will go to the bank. I didn't ask them about a lump sum settlement option, but in any case I don't think it will be as straightforward as the UK. And bankruptcy in Ireland is 3yrs of course, plus I have to complete the PIA process for 6 months first I believe.
As well as the bankruptcy route, are you now advising and bringing people through the process of lump sum IVA Steve? At this stage it might be a good idea to speak with you I think...my wife is completely on board with me going down the UK route which is great.
Thank you.
What is the minimum amount of time one would have to live in the UK in order to go through the bankruptcy process and does it need to be full time ?I am getting many more of my UK bankruptcy enquiries who would be suitable for an IVA. It is in effect a shot to nothing. They have money available, that would have to go to the Trustee or OR anyway, so they might as well have a go at the IVA after three months. It could mean a done and dusted solution so much quicker.
Steve Thatcher
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