Inheritance windfall and F&F.

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by sara » Fri May 12, 2017 9:39 am
I am one year into an Iva. I shortly will be receiving a large windfall in terms of inheritance. To do a full and final settlement is it the cost of the reduced debt that was agreed when entering the Iva agreement for example my total debt cost was around £20,000 reduced to around £7,000 including the cost of the Iva over the 5 year term, so roughly by the time I receive the windfall I would have paid around £2,000 off the debit so would my final settlement be the £5,000 or £18,000?

Thank you.
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by redboxtree » Fri May 12, 2017 9:52 am

If the amount is significant you may find that the executor of the estate or solicitor is obliged to send the full amount to the IVA company.

You may only get something back if there is anything remaining after 100% is paid plus interest and fees.
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by kallis3 » Fri May 12, 2017 10:03 am
Your solicitor should do a check and it may be that all of it goes across to your IVA if you can pay it all in full.
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Lisa Thomas
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by Lisa Thomas » Fri May 12, 2017 10:32 am
You always owe the total debts, interest and costs in full. The £7k would have been an estimate only, based on what they believed you could afford to pay back over the time.

£20k plus say 1.5 years of interest plus say 15% of costs is c£26k.

Deduct the c£2k paid will leave c24k.

Therefore (very roughly) unless your windfall is c£25k your IVA will continue.

You could ask creditors to waive their right to statutory interest - this may help a little.
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Michael Peoples
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by Michael Peoples » Fri May 12, 2017 12:35 pm
Were you aware of the potential inheritance when you entered the IVA as if so it was the wrong decision. If your IP was also aware then the advice may be suspect.
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by Foggy » Fri May 12, 2017 3:22 pm
As mentioned above, they will want a figure up to the balance of the full debt, plus fees and possible statutory interest. As well as the 15% fees Lisa mentioned, there will also be Nominees fees and disbursements to add in ( possibly another £2000).
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