www.iva.co.uk

Hi,

I am in my 4th year if an IVA and i am due to receive an inheritance. The inheritance will just cover the remainder of what i owed but not including the fees that have been incurred (About £5,500). Will they take the full amouny from me and make me pay for my final year or are they likely to accept a final settlement from the inheritance. Also, what would happen if i refused the inheritance?

Thanks

If for any reason you would be unlikely to be able to continue with your monthly repayments, it may possibly be accepted as a F&F. Otherwise it would be treated as a windfall and your repayments would continue meaning a slightly higher final dividend.

I have no idea what would happen if you refused the inheritance, but I presume you are liberty to do that if you wish.

You could ask your IP to put the offer of a full and final payment forward to the creditors to see if they would accept it.

I don't see any reason why they wouldn't.

As you are so far in it would deffinitely be worth putting the offer forward.

Hi
I would say that you would have to accept the inheritance otherwise your creditors will lose out, it is a good question though.
Regards

You cannot refuse a windfall - it is a windfall by right of your entitlement, and not the acceptance of the money.

Thanks for your answers.

The person who left me the inheritance made me promise that i would only spend it on a deposit for a house but this was not stated in the will. Would this make any difference to how it is treated as it was verbal?

I am afraid not. What a shame this stipulation was not made clearer, but even then I think it would still be caught by the windfall provision.

Hi JC
You will need to contact your supervisor in the first instance however virtually all IVA proposals include a windfall clause that states that if you receive a windfall during the term of your IVA you must disclose it to your supervisor who will make your creditors aware of this. It is likely you will be asked to introduce the funds from this inheritance as part of your IVA. In addition you would be expected to continue with your normal contributions for the outstanding term of the arrangement or until the creditors are paid in full (after costs), if this is achieved earlier.

In relation to the intended use of the inheritance (as a deposit to buy a house) unless the will includes an express instruction as to what the funds are to be utilised for, in effect creating a trust, the funds would be caught under the windfall clause and should be introduced into the arrangement for the benefit of your creditors. Failure to accept the inheritance would, in effect, constitue a breach of the terms of the arrangement as you would be placing an assetwhich is caught under the terms of the arrangement outside the reach of your creditors.

Thanks

if you have inherited some money and in your 4th year of an iva,you dont need to refuse the inheritance,just dont accept it or for want of a better term act ignorant of it.i think you have 3 years to claim an inheritance,which as luck should have it will take you beyond the 6 years of your iva.[;)]

That is being very dishonest though if you know about the inheritance.

The idea of an IVA is to pay back as much as possible to your creditors, not try to hide money from them.

kallis3 wrote:

That is being very dishonest though if you know about the inheritance.

The idea of an IVA is to pay back as much as possible to your creditors, not try to hide money from them.

noooooo....many iva companies slogans are reduce your monthly payments and be debt free in 6 years...lol

they wouldnt sell many iva's if they use the slogan "The idea of an IVA is to pay back as much as possible to your creditors, not try to hide money from them"

its all about how you see the situation you are in,its widely accepted that many finacial institutions,i wouldnt say helped people get into the financial situations they are in but certainly didnt hinder it.

and we all know that "honesty" isnt exactly a word that rolls of the tongue of many in financial institutions.

It is certainly dishonest not to disclose this inheritance and the debtor should have notified their supervisor as soon as they became aware of the bequest.

However, creditors are not ogres and it may be worth proposing a variation to offer a full and final and close the arrangement down. Given that the legacy was intended for a house deposit creditors may allow you to then use your surplus to save up so that in two years when your credit file should be cleared you will be in a position to buy a home.

They may take into account your honesty and disclosure of the legacy and decide that what is on offer is a fair proposal.

I totally agree Michael.

Lil.me - the idea is to pay back as much as you can - if you can manage to pay back 100p in the pound, great. If you cannot manage that, then you pay back what you can.

Your debt is not written off until your IVA is completed, so you will always end up owing the full amount until that time.

I could not be so dishonest as to try and hide something like this from my IP.

I took the credit out, it is down to me to try and pay back as much as I can.

It doesn't matter if you wait to claim the money - you inherit it when a person dies not when you recieve it meaning it's still a windfall.