The IVA of the deceased will end and the debts will then form part of the deceased's estate as they would normally. They will then be settled from the proceeds of the estate. If there are insufficient funds in the estate they will be written off. The only debts that would pass to the surviving spouse would be joint debts, which would carry on as before.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
The IVA terminates on death and the debts are binding on that persons estate. However we usually call a variation to close one or both IVAs down based on payments to date and creditors are normally sympathetic.