I am in my 3rd year of my IVA, with a total debt of circa £65,000. The IVA is set to run until 2014/15. Sadly my Dad died 6 months ago, and this week my Grandfather died, so by default my Dad's share of my Granddad's will falls to us grandchildren instead of my Mum. I have told my mum about the IVA as it would be my Dads wish for any sum we inherit to be passed to my Mum. I know that anything we inherit goes straight into the IVA, but my Mum wants me to do a Deed of Variation and have the money go directly to her. I would be happy for her to have the money, butI believe that even saying I want a DOV would break the IVA agreement and it would fail, sending us bankrupt and possibly losing our home etc. My mum said that she has spoken to a solicitor who said that the solicitor executing the will may not even check if I have an IVA so there wont be a problem, and even if they did check it would be close to the time when they are releasing funds which could be after 2014 anyway.I also think that my Mum is thinking us going Bankrupt is worth it if she gains £65k, as she is worried about money for the future.I am so proud that we have worked so hard to get ourselves out of debt with the IVA, I don't want it to fail, but also my Mum is now making me feel like I am responsible for losing £65k of her money,and letting my Dad down, this is weighing very heavy on me. I have told her I will carry on paying the sum of my IVA monthly payments to her even after it has finished. She said that even if the IVA fails because of the DOV, she will then just give the money to us to pay the creditors so we wont go bankrupt but I dont want to take the risk, I have 3 children and I run my own business so bankrupcy would be terrible, but now I feel I am being selfish. Please could someone give me some advice? I cant believe I am back here stressing about debt when I thought our financial problems were resolved.
Anna, I am unable to answer your question, but I am sure an expert will be along shortly. How awful, that, at a time when you should be grieving you are consumed by such worries and circumstances. Sending virtual hugs and hope that something can be sorted out for you. I am sure your IVA company would not want your IVA to fail, and will do everything to support you in this. You do need to chat this through with your IP.
Hi Anna and welcome to the forum! This must be such a sad and unsettling time for all of you. But what your mum is asking you to do by not disclosing an asset/windfall to your IP does contravene your iva and could lead to the failure of your Iva and bankruptcy proceedings being brought against you. As you are so far through, you will have already paid a % of your debt off and with any settlement being so far away, you'll be chipping away at it even more. By going through the proper channels, you'll only pay the balance of your debts so there will be some left to you that you can hand over to your mum. I don't think you are allowed to transfer assets or refuse a share of inheritance while you are in the iva. I'm only making assumptions here, you really need your IP to advise you. And you aren't letting anyone down...you're not responsible for how the wills were written or what happened...you are a victim of Circumstance same as your mum.
It is possible that the will was written in a way that anyone who is formally insolvent receives nothing so you need to see a copy of the will. This would solve all problems but assuming this is not the case you cannot refuse the money.
You must also inform your IP once you 'become aware' of a windfall so it is immaterial when the bequest is paid out as it is captured by the IVA. Your mother should also take some advice because I would have thought that your father's share of the will would go to his spouse first of all and not his children.
Hi and thanks so much for the advise. I really haven't known what to do about this one. I always thought that any inheritance that would have gone to Dad if he were alive, would automatically go to Mum as his spouse and sole beneficiary, but she has checked it out and by default it goes to the children not wives?.
If the will does state that a beneficiary cannot be insolvent, where would the Will be redistributed to? i.e. could my Mum still receive it or would it go to another family member?
Also what would happen if I advised my IP of the "windfall", then carried on paying the IVA to completion in 2014? Surely if you only effectively receive the money in your hand after the IVA is closed then you would not need to pay it on top of everything you already have to creditors? Essentially we would have honoured the IVA, paid it off and closed it by then. Mind you, it could also come before the end of the IVA anyway.
It must have been in your grandfather's will that if any children predecease him then the money would go to their children and not their spouses. This would protect any estate from leaving the family if for example your mum remarried.
If you are disinherited as a result of the insolvency your share would either be divided among the other beneficiaries or held in trust until the insolvency is over. The executors may need specialist legal advice before paying out as it could be complicated.
If the inheritance is yours the IVA can be kept open until the money is paid out. The only alternative would be to offer a settlement to your creditors now and repaying the settlement as and when your bequest comes through.
Also the other thing I wanted to check, what point does the solicitor who is executing the will run an insolvency check on the beneficiary, is it at the point the will is read or when the funds are distributed?
My Mum thinks they won't even check but I have told her they always do. At the end of the day we don't even know at the moment how much if anything I am likely to inherit to be able to give it back to my Mum.
They will check and it will probably be before the funds are due for distribution so that all loose ends are tied up.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I would assume they would run a check but regardless it is your responsibility to inform the IP and failure to do so can have serious consequences.
Your garandfather is only recently dead so there may be other things to come out and perhaps there has been a new will drafted since the death of your father. Personally, I would notify the IP that I may be coming into a bequest and details will follow as and when.
