What happens regarding interest on an inheritance? Chances are, at some point both Mr Ivamess and myself will inherit as both sets of parents are well into their 80s
When we entered into the IVA the amount of interest that creditors were charging was silly and the hikes in rates really became the reason we could no longer afford to keep going as they kept us on minimum payments whilst rates got increased still further every so often. The amount of capital repayment was minute - so hundreds and hundreds of pounds of interest were being paid monthly vs very little capital.
My question is, do they charge horrific amounts of interest on the original debt or is it capped at statutory rates? If it is the original amount, how many years' worth is it - is it the amount of time that you were in the IVA or is it the full five years' worth?
There are two interlocking IVAs so if one inherits can they offer a full and final figure to the partner IVA to try to mitigate some of the effects when the other spouse inherits? (I am thinking that if one inherits, say, three years into the IVA and can clear the other's debt rather than paying interest twice over - does that make sense?)
First of all it may be worth advising your parents of the IVAs so they can seek to protect their estates from your creditors. A good lawyer can do this but your parents need to know and then take that advice themselves.
Failing this, any inheritance would repay the creditors in full plus possibly statutory interest at 8% per year and not at the previous contractual amount. The interest is added for each year the IVA is in place and is simple and not compound.
Thank you. It is one of those situations like when people don't go to the doctor because they are ashamed - we are too ashamed to tell our parents of this situation. I know it is stupid but they are of the "old school" and don't condone debt [:I]
If it was just statutory interest and over the time frame of the IVA's existence then it is not so bad - we owe the money and would feel honour bound to repay.
Could I, if I was for example the first to inherit, clear my husband's IVA as a full and final settlement (assuming that I inherited sufficient funds) in order to protect his inheritance at a later date? Or, because the IVAs are interlocking, are the rules different?
You would need to confirm with your own IP as to whether the funds would be paid into the 'pot' for all creditors or whether the funds would be paid to the estate of whoever inherited the funds first. This would depend on how the proposals were written and whatever terms and conditions were used.
Can you contact me off the forum please to discuss this ivamess. I prefer all clients of my own firm to be fully and directly advised by us, as we have detailed knowledge of your case and current circumstances - and we will be able to answer these questions for you.
I inherited and paid off both our iva's so that it finished together ... always took the attitude the debts were all joined even if not in name on the account !
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !