windfall

[welsh_bess]

we are in an IVA with approx 17 months left we pay £270 each month.
We would like to claim our bank charges back, but would this be classed as a windfall or would we be allowed to keep the money, or does it go into the IVA. In which case wouls it shorten the length of time we have the IVA for? PLEASE HELP[88][88]

[Oliver]

Really that would be up to your IP but it is likely that all or part of the money will have to go towards the IVA.

This is unlikely to cause your IVA to finish early (unless it is a very large sum of money) as the creditors are likely to expect that you continue to make your usual monthly IVA contributions.

Speak to your IP and discuss this matter with them.






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Best Regards
Oliver
www.thomascharles.com

[welsh_bess]

We have calculated that we owe £4590.00 (17 x £270 = £4590.00), the bank charges we have for the last 6 years come to a little over £4000.00 do you think this would settle our IVA early?

[Oliver]

The best thing to do is contact your IP and discuss this with them. This is slightly unchartered territory as the courts have only recently decided in favour of the account holders. I fear that creditors will potentially decide to take both the money from the claim and continue to ask for your monthly contributions.

Best Regards
Oliver

Thomas Charles Ltd: Experts in all things IVA
www.thomascharles.com

[MelanieGiles]

This is definately a windfall in my opinion. Whether your IVA can be shortened as a result depends upon the dividend you originally offered. An IVA is only usually shortened by the payment of additional monies from a windfall, if payment is made in full ie a dividend of 100p in the £

Coincidentally, I managed to settle an IVA for one of my clients yesterday with a 100p in the £ dividend from a windfall (inheritence from a deceased relative). Althouth the circumstances were quite sad, the client was really happy to be out of his IVA after 2 years.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Skippy]

I've got a question if someone doesn't mind helping me!

My IVA has a clause which states there can be no variations in the first 2 years. If I was to come into money (which I haven't!), would I still be able to settle the IVA, or would I be expected to pay it for the first 2 years?

Thanks!

Three down, fifty seven to go until freedom!

[jamesfalla]

Skippy

The clause in your IVA has been added by your creditors to protect them against variations which will make them worse off. For example, they will take a dim view if in the 1st 24 months of your agreement, you say that you can no longer make your normal monthly contributions because of an increase in your expenses.

However, I suggest that if a third party were to offer you a lump sum to settle your IVA early (eg a lump sum which would not be available to you for any other reason than settling your IVA early) then your IP would be able to offer this to your creditors. This could be to their advantage and I think they would certainly be prepared to consider the offer - a bird in the hand and all that....

All the Best
James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions, with extensive experience of solving personal debt problems over the past 10 years. I am regularly featured on BBC News, Finance Programs and Radio.

[MelanieGiles]

Skippy

The "no variations in 24 months" clause is being used by creditors to stop people making early settlements of IVA within that period. It is a little odd to me as if there is the opportunity to do this, most clients will offer a lump sum settlement in the first place. If you have accepted this modifiation, then legally there can be no modifications, so even if your creditors were prepared to accept an offer, they contractually can't unless you got 100% of them to accept. With variations in my experience it is often difficult to get one vote!

If the additional money were to be a windfall, you also could not use that to make an offer to your creditors as they are entitled to that money on top of your ongoing contributions.

So to answer your query, contractually you could not make the offer in the first place! It's a mad world isn't it!!!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[neverending]

Melanie
Are you sure "If the additional money were to be a windfall, you also could not use that to make an offer to your creditors as they are entitled to that money on top of your ongoing contributions.".Surely creditors cannot be entitled to more than you actually owe them??

[MelanieGiles]

Yes you are correct there Neverending - if the windfall were able to pay the creditors in full (and costs of administering the arrangement.) If creditors do not get paid in full then contributions continue

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk