www.iva.co.uk

Hello everyone,

We completed our IVA last year however a friend of ours is in one currently and was picking my brains about something that I just wasn't sure about so I thought I would ask you guys. I did suggest they join up however they are not very computer savvy. I would also note that I am a little vague on their situation however you may be able to fill in the blanks!!!

They are around 3 years in, they are not home owners as the husband is in the army. He is retiring at the end of this year and as such receives a rather large payment from the army at that time. Their hope is to use that money to purchase a static caravan home, as when he comes out of the army and army accommodation this will render them effectively homeless. My initial thoughts on this is that this money will be seen as a windfall and as such will have to come into the IVA but I thought I would check here first.

Many thanks

I, too, suspect that this would be treated as a windfall, unless your friend can offer a F&F to close the IVA early before this award is made.

I would also say that his gratuity would be classes as a windfall and would be swept up by his IP. He needs to speak with his IP over this as if the consensus is that he will have to pay it to the IVA then he can defer the pension cash out part of the gratuity payment (commutation of pension) . His monthly pension will be slightly higher and the lump sum significantly smaller, but the IP will not have as big a slice of the gratuity that could be available if he commutes his pension on retirement. With only 2 years left on their IVA it is financial madness to commute his pension fund when he leaves the army.

Thank you for the help, I have passed this on to our friends and they are talking with their IP now to see what is the best course of action.

This should have been discussed before starting the iva. Pity.

Paul