F&F with inheritance money?

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poppet09
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by poppet09 » Wed Jul 26, 2017 4:48 am
Hi we are in our 2nd year of Iva and have approx £6k to pay over next 4 years. Our original debts was approx £55k I will be in approx 5 months be receiving some inheritance of approx £30k do you think I can pay this as a final offer and finish the Iva?
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Michael Peoples
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by Michael Peoples » Wed Jul 26, 2017 8:08 am
It is possible that creditors would accept this as a full and final given the relatively low monthly payments and the large windfall. There is no harm in asking.
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Lisa Thomas
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by Lisa Thomas » Wed Jul 26, 2017 8:10 am
Oh dear. If you receive the inheritance you will have to pay it all over into the IVA under the windfall clause unless and until the balance of your debts, statutory interest and costs have been paid in full. Only then would you receive anything back.

I'm not sure credtors would accept a F&F of £6k when they know you have £30k and they are entitled to the £30k.

Se my video here:

https://www.youtube.com/edit?o=U&video_id=L8M98FI5OqQ

Based on your figures I suspect you will not see any of this money.

Is it too late to change the will or has the person already died?

It might be best to try and get third party funds from somewhere to settle the IVA with a full and final at £6k instead and hope you get your CC before you receive the inheritance but it's not certain as some firms take up to 6 months to issue the CC.
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Foggy
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by Foggy » Wed Jul 26, 2017 8:48 am
Tecnically the creditors are entitlesd to the inheritance, as Lisa explains, so they would not be happy to "bargain" with it. However, as Michael suggests, they might be happy to call it quits after getting such a large amount over and above the anticipated return, so always worth asking.

As Lisa mentions the full amount owing includes possible statutory interest at 8% p.a (about £4,400) ..... it is possible that the creditors might forgive this element so you pay in full earlier -- indeed your proposal might alreadt exclude it.

If the inheritance is already in the pipeline (i.e the person has already passed and the Probate granted) then, even if you did a F&F tomorrow the inheritance is still due to the creditors, unless agreed otherwise.
poppet09
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by poppet09 » Wed Jul 26, 2017 9:01 am
Hi thanks for your replies, yes I am fully aware that I will have to pay it all in. I just am hoping they will accept it as a full and final payment and we can come out of the Iva. They have already received approx £4K back from ppi claims.

Yes my mum has already died we haven't got probate yet so may be a while, just hoping they will accept.

I personally would accept 30k instead of 6k.
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Lisa Thomas
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by Lisa Thomas » Wed Jul 26, 2017 9:16 am
Sorry to hear about your Mum.

It's worth a shot to test the waters.

Based on my calculations even if they waive the interest it won't make a difference as the £30k will still not be enough to pay off the debt and costs.

I am assuming £55k plus say 2 years of interest to date at 8% plus costs of say 15% = c£73k.

Presuming you may have paid say £3k to date and even the PPI of £4k leaves c£65k.

Even if you take off the interest of c£9k that leaves c£55k.
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chrissy12345
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by chrissy12345 » Wed Jul 26, 2017 12:38 pm
Insist that any IP fees are done on time costs when dealing with the inheritance as there should be no early Christmas present for the IP getting a 15% jackpot on £30k inheritance. If they refuse, report them.
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Foggy
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by Foggy » Wed Jul 26, 2017 12:45 pm
chrissy12345 wrote:
Insist that any IP fees are done on time costs when dealing with the inheritance as there should be no early Christmas present for the IP getting a 15% jackpot on £30k inheritance. If they refuse, report them.



You cannot insist that they deal with monies paid in other than in the manner agreed at the inception of the proposal without putting forward a variation and getting creditor approval.
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chrissy12345
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by chrissy12345 » Wed Jul 26, 2017 12:47 pm
Foggy wrote:
chrissy12345 wrote:
Insist that any IP fees are done on time costs when dealing with the inheritance as there should be no early Christmas present for the IP getting a 15% jackpot on £30k inheritance. If they refuse, report them.



You cannot insist that they deal with monies paid in other than in the manner agreed at the inception of the proposal without putting forward a variation and getting creditor approval.


You can
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Foggy
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by Foggy » Wed Jul 26, 2017 12:50 pm
chrissy12345 wrote:
Foggy wrote:
chrissy12345 wrote:
Insist that any IP fees are done on time costs when dealing with the inheritance as there should be no early Christmas present for the IP getting a 15% jackpot on £30k inheritance. If they refuse, report them.



You cannot insist that they deal with monies paid in other than in the manner agreed at the inception of the proposal without putting forward a variation and getting creditor approval.


You can


Please enlighten me. We have had this discussion before ---- the IP is only required to justify his fee and an existing contractual agreement strikes me as ample justification.
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chrissy12345
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by chrissy12345 » Wed Jul 26, 2017 12:54 pm
Foggy wrote:
chrissy12345 wrote:
Foggy wrote:


You cannot insist that they deal with monies paid in other than in the manner agreed at the inception of the proposal without putting forward a variation and getting creditor approval.


You can


Please enlighten me.


Whether you like it or not IP has to have fair and reasonable fees AND has to be able to justify them. 4.5k fees on 30k automatic distribution (no work basically) is neither of them. At this point what is in the proposal becomes irrelevant when these sorts of sizes of windfalls are concerned
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Foggy
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by Foggy » Wed Jul 26, 2017 1:03 pm
chrissy12345 wrote:
Foggy wrote:
chrissy12345 wrote:

You can


Please enlighten me.


Whether you like it or not IP has to have fair and reasonable fees AND has to be able to justify them. 4.5k fees on 30k automatic distribution (no work basically) is neither of them. At this point what is in the proposal becomes irrelevant when these sorts of sizes of windfalls are concerned


I would be interested to see this go to court -- but, unfortunately, there aren't many of us in or freshly out of an IVA who are in a position to take it to court If pushed, maybe the IP would. To be honest I can see the arguement from both sides, but my personal views are irrelevant.
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chrissy12345
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by chrissy12345 » Wed Jul 26, 2017 1:08 pm
That's why I said report the IP if he doesn't and let the regulators sort it out. Any reputable IP wouldnt even entertain taking that sort of fee from an inheritance.
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kallis3
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by kallis3 » Wed Jul 26, 2017 1:13 pm
I'm sorry Chrissie but they would - at the end of the day they are a business and charge fees.
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chrissy12345
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by chrissy12345 » Wed Jul 26, 2017 1:19 pm
kallis3 wrote:
I'm sorry Chrissie but they would - at the end of the day they are a business and charge fees.


And therein lies the problem. Have a read of SIP 9 and all of the legislation on fees and then you might understand a bit better!
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