Told my pension lump sum, which is much greater than my debt, has to be paid into IVA. Why ?

[Paula.mc]

I am near the end of an iva. My debt was £25,000. I have paid £14,500 in approx, will also £4000 paid direct to a bank under the IVA which I wasn't aware they would be part of the IVA. Now I am told my pension lump sum which is much greater than what I owe, has to be paid in total to the IVA. Why, when I only owe then approx £8,000 with 12 months left to pay on the IVA.

[relieved33]

In an iva you always owe the total original debt plus statutory interest(unless specifically excluded) plus fees. If your pepension lump sum is greater, you will get to keep any surplus. Was the lump sum mentioned in your original proposal?

[kallis3]

Check your paperwork to see if your pension was ring fenced - a lot of them were. Mine was.

[Lisa Thomas]

Have you already drawn down the lump sum?

Most pension are excluded unless you draw them down without authorisaiton in which case then they simply become an asset of your IVA.

Perhaps best to put forward an F&F settlement from the pension and get creditors to approve this first.

Also make this decision carefully as you will of course be losing this pension for the future.