www.iva.co.uk

my MIL died leaving a small house worth 55K between 5 children. My BIL had given us the deposit to our house on the understanding that our share of the house would pass directly to him when the time came. We are now in an IVA and effectively will not be getting anything from this inheritance. Can the IVA company demand this money, even if we haven't got any.

Hi there and welcome to the forum

Yes - because unless the terms of the will were changed to remove your entitlement, then your brother-in-law is an unsecured creditor and the inheritance monies will need to be paid into the IVA.

Did you discuss this arrangment with your IP at the time the IVA proposals were presented?

no didn't discuss this as we completely forgot about it.

I think that you need to come clean now and enter discussions, because the inheritance money is a windfall which needs to be notified to your IP within 42 days of you becoming aware of the inheritance. Why didn't your brother-in-law take a legal charge over your property to secure the deposit monies?

Surely this was a sale and there must be some form of agreement. If your BIL bought your right to an inheritance when he advanced you the money, then what is in the will is irrelevant.

The fact that you did not inform your IP of the arrangement implies it is not a loan but I absolutely agree with Melanie that you need to come clean and your BIL needs to consider legal advice.

if we contacted the solicitor and got her to draw up the legal documents now, is it too late? We're really worried as we don't have this money. We were also in the process of offering a f&f (loan from my dad) and I know he wouldn't have any more money to cover this as well. The inheritance hasn't been settled yet.

If there was no agreement written up it would not be the right thing to do one now. You will have to tell the IP and your BIL but perhaps a variation could be called to safeguard him rather than any long drawn out legal action.

thanks for your help. just spoke to IP. says there is nothing she can do to help. we are still going to put in a f&f and hopefully they will accept that. Ip says they will leave the IVA open and we can pay the money when the house is sold. Hopefully by that time we will have saved enough to pay it.

Surely you cannot keep an IVA open after a full and final! If you do that it is neither 'full' nor 'final'. It would better to explain to creditors what happened and try and close the IVA down. Any benefit to creditors from the share of the estate could potentially be lost if your brother in law objected and tried to defend his position. I would try and close it down with the lump sum.

can't see how this would work. Have no chance of getting any more money to pay.

definitely no more money available. IP didn't think there was anything she could do. Should I ask her to look into it more. What are the legal implications.

she says if we don't pay this in the IVA will fail. Would she have found out about the money if we hadn't said anything. Feel really down.

I think the problem here is creditors will have to be advised of the inheritance, and then this may make them feel that the full and final offer is not best offer. How much would you be due from the inheritance, and how much is your father proposing to lend you. Might be better to argue that the funds from your father are in lieu of the inheritance, leaving yourselves to settle up with him once the IVA has concluded.

Have to say that I still see the brother-in-law loan as an undisclosed unsecured creditor in the IVA.

Melanie, what do you mean by this.
Have to say that I still see the brother-in-law loan as an undisclosed unsecured creditor in the IVA.
inheritance approx £11K
father will give us 27k to pay off debts
Ip thinks they will accept this, but still need the 11K when the house is sold

and what happens if the house sells for less