in an IVA, what happens if one of us dies

[Rockhound]

My wife and myself are currently in an IVA, can you tell me what happens if one of us dies

[catullus]

Most proposals provide that the money that is paid in to the IVA is held on trust for creditors in the event of either failure of the IVA or the death of the person in the IVA.

If one of you were to die it would be open to the survivor to continue the IVA, as before, taking in to account revised income and expenditure allowances.

If the revised amount that could be contributed implied that the original objectives of the IVA could not be acheived, or could be acheived earlier, a variation of the proposal might be necessary.

Hope that helps.

[MelanieGiles]

If you are subject to interlocking and mutual voluntary arrangements, your IP would need to separate the surviving partners arrangement from the deceased partner. This ought to be done by dividing the payments paid in on a pro-rata basis subject to income variables, and an equal sharing of costs. The surving partner would then carry on with their own IVA, or have it varied to suit their particular circumstances.

If there is any life insurance money in place, which is unassigned, this will be paid over to the insolvent estate for the benefit of creditors. If the policy had been assigned to the surving spouse, this forms a windfall into that estate - so it is important to review the nature of any life cover you currently hold to see if this remains appropriate.

There are also now special insurance schemes to cover IVA payments in the event of death which also might be worth looking into.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp