Settle IVA in full???

[frequentflyer]

Can anyone tell me whether once an IVA has been approved on a 5 yr basis, should you inherit a substantial amount during the course of the iva, can you then make an offer to finish the iva by paying a lump sum??
Also, if the answer is yes....how much would you be liable to payback, the original full debt, the agreed debt under the iva or can you negotiate a full and final settlement??

[catullus]

The IVA proposal will almost certainly provide that the inheritance would automatically have to be paid in as a windfall. That being the case it's not really yours to offer in full and final settlement.

If a third party, as an example, was prepared to put an amount in to the IVA in settlement (in this case this is money that the creditors wouldn't automatically receive)the amount that needs to be offered should be close to what the creditors originally accepted, discounting for Supervisors fees that will be saved through early settlement.

[herbek]

It would have to relate to the amount inherited.

Let's assume you owe £50k and are paying back 50p in the pound so £25k and are 1 year in so already paid back £5k

There's a number of possibilities.

1. You inherit in the £1k - £10k area. Suspect you can wave goodbye to it.

2. If you inherited £20k would that be taken in full and you carry on payng so a payback of £45k or does the fact that you've paid back the agreed amount in the IVA is it finished.

3. You inherit £45k. Do you give £20k to finish the IVA or all £45k to bring your IVA fully paid to £50k and it finishes.

4. You inherit £60k. Again would be pay £20k, £45k or worse would the creditors expect lost interest to be paid form the start of the iva that could consume some or all of the extra over the original £50k debt.

Anyone had any of these scenarios as I hope my parents and grandparents live long and prosper! but if they don't I could receive significant funds greater than the IVA so am interested in what actually happens.

[catullus]

I think that you should read my earlier post herbek.

[herbek]

I disagree Catallus because on that basis any inheritance regardless of amount has to be paid to the IVA. If I get an inheritance of £100k or won the lottery and got £1Million and owed £50k at the start of the IVA then no sorry that would not all go to the IVA.

I can totally assure you that if my mother dies tomorrow and I received £150k from the sale of her house then I certainly won't be handing £150k to my IP just because I have an IVA with an original debt of £50k.

You have missed the point of my reply to the OP.

[catullus]

And I can totally assure you that if you refused to, your IVA would fail.

The point you're missing is that any surplus money is refunded to the person in the IVA after the debts (and statutory interest) have been paid in full.

Understand now?

[herbek]

No,

I owe £50k and now have £150k in the bank, I couldn't care less if the IP failed the IVA at that point because I am now in a position to pay cash to any and every creditor including any IP fees.

I would not in this instance give my IP the money. I would demand the the IP gives me a full and final bill.

[catullus]

Fair enough, but if the IVA failed creditors would be entitled to charge interest and charges back to the commencement of the IVA.

I think that it would be cheaper to allow the money to sit in the Supervisors interest bearing bank account and let him pay off the debts, but with that much money it's your call!

By the way, you would be in no position to "demand" that the IP should give you a full and final bill.

[MelanieGiles]

Catallus is right in this post, and Herbek I think that you ought to understand a little more about the IVA process and the spirit of courstesy which needs to be afforded to your IP. Whilst you are in an IVA it is the IP who is responsible for paying creditors. In circumstances such as you have described, the IP will calculate a final sum for you to pay over and will effect this for you. Very simple and easy to do.

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