Can someone tells me what happens to an IVA once a person dies please? My brother and partner both had IVAs. The IVAs included 2 joint loans and the rest individual loans, credit cards etc. Sadly my brother passed away. He had a life ins policy payable to his partner along with a company pension and death in service payment also payable to his partner. Now would she have to make a F&F payment in respect of her individual debts along with the joint debt. Also what would happen to my deceased brothers debt? There is currently no equity in the house or other assets of his, but his partner will look to pay off the mortgage in time but am I right in thinking she should wait for the IVA in my brothers name to be written off before doing so as surely this would release lots of equity and therefore be classed as an asset in my brothers estate?? Thanks in advance.
I guess i'm trying to ascertain if she will be liable for his debt first and foremost. Also just thinking, when she does declare the money which she has 'inherited' does she have to pay the full amount of debt which was taken on initially or will it be the amount which would have been paid over the 5 years? I'm assuming it will be the full amount :-/
Firstly, may I offer my sympathy to you on the death of your brother. There are no doubt numerous questions you must want answers to. My sister was in a similar position several years ago when her partner was killed in a motorbike accident, but neither of them were in IVA's. I think the law has changed since then so I may not be 100% correct on this.
Had your brother had the foresight to leave a will? Is the home they share in joint names? Does he have any children? The laws for death in cohabitation are complicated! I think that whatever insurance money is realised will go to his estate and unless he has alternative arrangements to meet his liabilities in the event of his death then obviously the insurance money will go toward payment of his debt and the joint debt but as far as the partners liabilities are concerned then I believe that they will continue in the Iva until the partner is in a position to clear them on her own.
The insurance company may be able to offer some help and of course there is always the good old CAB
No unfortunately no will. They have 2 children together. So are you saying even though the insurance policies state that the money goes to his partner instead it will go into his estate to pay off his portion of the debt? Also do you know if it would be the full amount of debt owed and not the reduced debt which would have been written off at the end of the 5 year IVA term?
It would be the full amount of debt owed. Even though an IVA is able to write off a portion of the debts, you will always owe the full amount until it is completed.
So sorry to hear of your brothers passing...Can I suggest a discussion with the IP and the questions posed to them ...the individual terms of the IVA will dictate what happens next. I know our IVA stated you had to inform your IP as soon as inheritance was known ..not wait until it was received..Each IVA is different and only the IP can give the definitive answers that you are looking for.
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
I really think you may need to seek professional advice about this I'm afraid. If there is no will and insurance left to a named person there will be other finances to sort out and you could find that the whole estate has to go to probate. If ths is the case you won't be able to finalse anything until this is completed. If your brother wasn't married then I think his children would have the first claim to any inheritance.
Seek out a family law specialist and take it from there please xx
I am truly sorry to hear of your loss. Our thoughts must be with you and his family at such a sad time.
If the life assurance policy was assigned to his partner, then the proceeds do not form part of his estate, but they will be a windfall in her IVA. If she has surplus money after paying off her debts, then none of this will be needed to fund his IVA, which naturally terminates on his death.
