What Happens If You Hide Money From IVA?
As a responsible person, you have acknowledged that you are in debt and would like to get rid of it. Entering an Individual Voluntary Arrangement (IVA) can be an effective way to do this, yet there are times when we are tempted to hide money from an IVA. Perhaps you feel you deserve to make a pleasurable purchase, or you are simply tired of surrendering all of your extra money every month.
It is possible to hide money from your IVA, but should you? You certainly can, but there can be serious ramifications if you do.
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Would My IVA Provider Know if I Hide Money?
Remember that when you initially applied for the IVA, you were required to provide wage slips, bank statements, details of your accounts, and other information to help design an affordable monthly payment. Bonuses, extra income, and savings accounts were included in your IVA plan.
As a result, your IVA provider and Insolvency Practitioner (IP) have a very good measure of your income and living costs. Hiding money could catch their attention.
What if I Do Hide Money?
Your IVA is a legally binding agreement between you and those to whom you owe money. This agreement is overseen by the courts.
If you attempt to hide any funds, you could experience any number of punishments as a result, including IVA failure.
What Does IVA Failure Mean?
Your IVA is likely to fail if you are caught hiding assets or money that could have been applied to your outstanding debt. If you have financial resources of which your IP is not aware, it is a breach of contract.
IVA Failure may proceed in the following manner:
- Your IP will send you a letter of termination
- You will receive a failure report from your IP
- The IVA arrangement will end immediately
- You will no longer make payments to your IVA or IP
- You are then responsible for making arrangements with your creditors to pay your outstanding debt
What Other Punishments Could Be Involved?
Other difficulties resulting from hiding money from your IVA could include:
|Bankruptcy||One benefit of an IVA is that it gives you protection from creditors who might otherwise be hassling you. Once the IVA fails, it is terminated and that protection is no longer available.
Creditors and your IP both have the power to make you bankrupt because you breached the agreement.
|Court Action||Hiding money or assets from a legal agreement is a valid basis for ending the IVA and it is legally considered to be a fraud. Your creditors and the IVA provider have the right to take you to court on this basis.|
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