If you decide to use an Individual Voluntary Arrangement to repay your debts, it’s crucial that you disclose all of your income because it’s a legally binding agreement between you and your creditors. Hiding money from IVAs can lead to serious consequences.
We’ll go over how to make IVA payments, how the windfall clause functions, and what could happen if you try to hide money from your creditors in this guide to the idea of hiding money from an IVA.
Can you hide a bank account from an IVA? This question might pop up in your mind if you’re considering an Individual Voluntary Arrangement (IVA) to manage your debt. While the answer might seem tempting, it’s crucial to understand the severe consequences of attempting to hide money from an IVA.
Why Hiding Money is a Bad Idea:
An IVA is a legally binding agreement between you and your creditors, built on transparency and honesty. Hiding money from your IVA not only violates this agreement but also constitutes fraud, leading to serious repercussions.
Consequences of Hiding Money:
- Legal Action: Your creditors can take you to court, resulting in additional legal fees and potential imprisonment.
- IVA Failure: Your IVA will likely fail, leaving you responsible for the remaining debt.
- Bankruptcy: You might be forced into bankruptcy, further impacting your financial future.
- Damage to Your Credit Score: Hiding money can severely damage your credit score, making it difficult to secure loans or credit cards in the future.
Transparency is Key:
Instead of playing a dangerous game, embrace transparency. Your IVA provider will have access to your bank accounts to ensure accurate assessment of your financial situation and determine affordable repayment plans.
Remember:
- Honesty is the best policy.
- Hiding money can lead to severe consequences.
- Transparency helps you achieve a successful IVA and a brighter financial future.
Additional Tips:
- Seek professional advice: Consult a financial advisor or debt expert for guidance on managing your debt.
- Explore alternative debt solutions: Consider other options like Debt Management Plans or Debt Relief Orders.
- Focus on rebuilding your credit: Once your IVA is complete, work on rebuilding your credit score through responsible financial management.
Hiding money from an IVA is a dangerous crime that carries serious repercussions. For a better financial future, embrace openness, collaborate with your creditors, and concentrate on completing a successful debt repayment plan.
What is the windfall clause and how does it affect my IVA payments?
A lot of IVAs come with what’s known as a windfall clause. The windfall clause essentially puts in writing the fact that any additional income, monies, or windfalls (i. e. a lottery win or inheritance) needs to be put towards your arrangement.
You can contact your IVA provider to find out more about the types of events that qualify as windfalls and to find out exactly how much of your windfall will need to be paid into your IVA.
For the avoidance of doubt, though, the best course of action is for you to get in touch with your provider and declare the additional earnings right away if you ever find yourself with an unexpected windfall during your IVA.
How we helped Paige
Though trite as it may sound, that was the best choice I have ever made and it has truly improved my life.
Paige , IVA Customer
Hiding Money from your IVA – Should You Do it?
FAQ
Can I still have a bank account with an IVA?
Can I have savings if I have an IVA?
Do they check bank statements for IVA?
What can you not do with an IVA?
Can I hide money from my Iva?
When your Insolvency Practitioner (IP) drafts your IVA proposal, your monthly repayments are based on what you can afford, taking into account everything from your monthly income and living expenses, to bonuses, extra earnings, and even your savings account. The way the arrangement is set up makes it difficult to hide money from your IVA.
Should I include my Bank in my Iva?
If your bank is one of your creditors and you plan to include them in your IVA you will need to open a new account. The reason for this is the banking Set Off rule. Set Off allows a your bank to help themselves to money in your bank account if you have other debts with them which you do not pay.
Is hiding money from an IVA a breach of contract?
Not only is hiding money or assets from the arrangement a breach of contract, it’s also fraud. While it’s not guaranteed, there is every chance you will be taken to court by your IVA provider or your creditors, and your decision to hide money from your IVA could even result in jail time depending on how serious the charge is.
How do I protect myself from an IVA?
They can do this without your authorisation using a rule called Set Off. The only way to protect yourself is to start using a different bank which is not involved in your IVA. If you do not owe your bank money there is no issue. They will not be informed about your IVA and you can continue using your account throughout the Arrangement.