IVA and Medical Retirement

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Pete_1982
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by Pete_1982 » Thu Feb 01, 2018 7:00 pm
Hi,

I was after a bit of advice for my mother in law as I don’t know too much when it comes to IVA’s. She entered into an IVA in August 2017 which I believed reduced her debt from c£18000 down to c£6000. She has however, just been medically retired and so has been paid out in a lump sum for this. Whilst she now has these funds in her bank the money is obviously needed for living expenses over an unknown number of years.

The main questions really would be would this count as a windfall? When she declares this to the IP, will they be looking for her to pay off a percentage of the lump sum or a percentage of the IVA? Finally would these be the only options open to her once she declares her new circumstances or would she be able to carry on as she currently is?

Thanks in advance for any help!
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Foggy
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by Foggy » Thu Feb 01, 2018 7:16 pm
First of all her debt hasn't yet been reduced. During an IVA you always owe the full original debt, plus fees and possible statutory interest. If this lump sum is treated as a windfall ( which it could be) then it will go toward this debt. If it is treated in the same way as redundancy compensation she will be allowed to keep the equivalent of 6 months salary and pay the rest to the IVA.
These are far from usual circumstances so she needs to speak with her IP to see which way they are going to jump.
Pete_1982
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by Pete_1982 » Thu Feb 01, 2018 8:16 pm
Thanks for the reply Foggy. She will be speaking to her IP in the morning regarding it. She’s obviously worried that it will be treated as a windfall and leave her with not enough for her enforced retirement with no prospect of being able to work again. I presume this will be taken into by the IP when they look to speak to the creditors?
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Foggy
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by Foggy » Thu Feb 01, 2018 8:34 pm
Best of luck with it.
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