www.iva.co.uk

Hi. We are two and a half years into our IVa and my husband has just been in a car accident that was not his fault. He will receive compensation for his injuries in due course. Will this have to go to our creditors?

Pain and suffering is excluded and he can repair his vehicle. He may also need monies for ongoing care. Discuss with your IP the situation as most cases are settled out of court with no actual breakdown of how the settlement has been reached.

He could offer the lump sum as full and final bearing in mind he would be paying in some of the settlement that was his actual entitlement.

Thank you. Thats very helpful. Don't expect it will be enough to offfer as a settlement. But your never know. Our biggest hurdle is that we have to pay £15,000 in during the fourth year which is related to any equity in our house. At the moment the equity has pretty much gone with the downturn in the housing market. Not sure what happens then and who would lend it to us anyway? Our mortgage company is our largest creditor with the loans that are part of the IVA. Any advice will be much appreciated as it is very worrying.

Hi
As long as you have tried to remortgage then you will have fullfilled your obligation. Creditors may ask for a one year extension to your IVA in place of any equity release
Regards

There is a danger that creditors may have specified a minimum dividend and the equity would be needed to achieve this. You could offer your part of the compensation to creditors in exchange for the removal of the equity requirement.

Thank you both, for your advice. Will hang onto the compensation as it would go someway to showing that we are trying to meet their criterior. Thank you again.

Dragoness check what it says in your proposals regarding what happens if equity cannot be released so it doesnt come as a surprise at the time. Many IVA's continue for a further 12 months and then conclude others just conclude at the 60 month mark.

Hope Hubby is ok.

Paul

Thank you Paul. Sorry for the delay in replying. I seem to be permanently working so that we make sure we can meet the monthly payments. I have had a read and it doesn't seem to specify. The proposal said it is an anticipated payment based on the value of the house at commencement of the IVA in Jan 2006. The extension provisions state 6 months, then a further 3 if necessary. Think I will just have to wait and see. Hubby is improving thank you.

It does really depend upon the actual terms of your own IVA documents, so you are better off taking advice directly from your IP with regard to the compemsation payment.