Cashing a Pension

[gertrude]

My husband has cashed a pension as even though we have an IVA we also have an overdraft, we are going use some of the pension money to pay off the overdraft as our IVA review is in March. Can our IVA be cancelled because of the overdraft and could we pay of any of our smaller creditors with the money left after we have paid the overdraft.

[debbiw]

Hi Gertrude, Has this overdraft been authorised by your IP? If not then i would clear it asap, as credit is not allowed in an IVA without permission. Have both you and your husband got an IVA. If so then cashing a pension in maybe classed as a windfall, and you will have to tell your IP. Not 100% sure, but i'm sure one of the experts will tell you if so x

[Lisa2009]

If your husbands name is on the IVA then i believe it will be classed as a windfall and therefore have to be paid into the IVA.
As for the overdraft, i really would pay that off before your review as it wont be looked upon favourably.

[aguise]

Hi Gertrude I would say Debbbie is correct, you need to clear the overdraft if it was not specifically allowed by your IP. I would also think the money from the pension would be classed as windfall and would also be subject to the iva. It would not be right to pay some creditors with this money as this would be seen as preferential treatment and all creditors are subject to the iva and therfore entitled to their fair share.
As Debbie says wait for other answers from the technical experts.

Ang

[MelanieGiles]

Hi Gertrude

You really should not have an overdraft facility whilst in an IVA, but as you are using an excluded asset to pay it off, I would just alert your IP to the situation.

You should definately not pay off creditors who are subject to the IVA - but if there is surplus money and you are happy to pay some of the money into the IVA for the benefit of creditors generally, then I am sure your Supervisor will not turn it down!