Claiming pension while in last year of iva and may receive inheritance

Get expert opinion. This is the place for new questions to be posted.
8 posts Page 1 of 1
Ken9241
Posts: 3
Joined: Wed May 31, 2017 6:48 pm
by Ken9241 » Wed May 31, 2017 7:06 pm
Please can you help I am in the 6th and final year of my IVA finishes March 2018.
I am 65 in June 2017 and due to take my state pension I also intend to carry on working at least until the iva is finished. Do I need to contact my iva people to tell them about claiming my pension and what effect will this have on the iva, I can defer payment of the pension or will I be forced to take it.
Also my wifes mother passed away last month and we will inherit some money when her house is sold we have no idea when this will be sold and it is not even up for sale yet, the inheritance would pay off what we owe but not the full amount, if they take it all into the iva does it still end in March 2018.
The amount would be about £12000 and we owe £2500 of the iva, but the whole amount of the original debt. was £35000. So would they take all of that and would we carry on with our monthly payment up to March 2018. I am a bit worried about all of this.
User avatar
Michael Peoples
Industry Expert
Posts: 14957
Joined: Mon Nov 03, 2008 12:36 pm
Contact
by Michael Peoples » Thu Jun 01, 2017 8:25 am
You must notify your IP of any change in circumstances so personally I would defer my pension if I were to continue to work. Otherwise your payments will likely increase substantially whereas deferment would lead to increased income later for your retirement.

The inheritance must be disclosed once you become aware of the existence and it would be paid in full to the IVA. However if the IVA is yours and the bequest belongs to your wife then there is no need to tell anyone. Indeed she could offer some to your creditors as full and final settlement and allow you then to move on.
Ken9241
Posts: 3
Joined: Wed May 31, 2017 6:48 pm
by Ken9241 » Thu Jun 01, 2017 8:35 am
Thank you for your reply. If I defer my pension until the end of the iva, does that mean I don't need to declare it to the iva as I will not be receiving it?
the iva is in both our names so I would think the inheritance would go to the iva, it is probably going to be a while before anything happens and any money comes through,
do I need to tell them now or when the inheritance comes whenever that is?
After they get the money do I just carry on paying my normal monthly payment until the iva ends in March.
User avatar
Lisa Thomas
Industry Expert
Posts: 5739
Joined: Wed Dec 03, 2014 10:26 am
Contact
by Lisa Thomas » Thu Jun 01, 2017 10:14 am
Foggy often argues that the windfall date might not vest from date of death but from probate date. You might want a specialist insolvency solicitor to help you argue this point - I can recommend one if necessary.

Perhaps you could find some funds to finish your IVA now via a F&F on the basis the inheritance might not then 'kick in' until after the IVA is closed.
User avatar
Michael Peoples
Industry Expert
Posts: 14957
Joined: Mon Nov 03, 2008 12:36 pm
Contact
by Michael Peoples » Thu Jun 01, 2017 2:24 pm
Deferring the pension is not an issue in my opinion as you are continuing to work and no one can force you to draw it down. The inheritance usually needs to be decaled once you 'become aware' so that is open to debate like Lisa says.
Ken9241
Posts: 3
Joined: Wed May 31, 2017 6:48 pm
by Ken9241 » Thu Jun 01, 2017 7:07 pm
Thank you Michael and Lisa,
I think we have resigned ourselves to losing the inheritance money, even though it might not happen before March.
We just want our iva to complete without any hitches as it has been a tough 5 and a half years.

Regards the state pension, I would get £157 a week but tax would be taken from that, how much would have to be paid into the iva and would they just increase my payment or would the whole iva have to have to be changed for example a new proposal made to the creditors. I am thinking it might be worth just paying the extra but I could not cope with having to change anything as we are so close to it completing and have had a perfect payment history.
User avatar
Michael Peoples
Industry Expert
Posts: 14957
Joined: Mon Nov 03, 2008 12:36 pm
Contact
by Michael Peoples » Fri Jun 02, 2017 8:12 am
This would likely be done at the annual review. Your IVA payments should increase by no more than 50% of the net increase in surplus income after allowing for increased costs of living. Bear in mind too that you will cease paying national insurance so your payments will rise when this happens so the creditors will already be doing quite well.

Personally I would defer if I could afford to and then decide after the IVA whether to take a lump sum or increased state pension.
User avatar
Foggy
Forum Expert
Posts: 22863
Joined: Fri Dec 17, 2010 11:14 am
Contact
by Foggy » Sat Jun 03, 2017 3:56 pm
I would defer the pension until the IVA is done and dusted, purely for the sake of simplicity. It is not long now.

Regarding the inheritance, yes, this would go into the IVA and payments into the IVA would not be affected until such time as monies received equal the full original debt, plus fees and also possible statutory interest ( it is however possible that this interest has been excluded or that the creditors would agree to exclude it now ).

As Lisa mentions, I often contend that an inheritance is not to be considered at all until Probate has been granted, as, until that time the Will is inoperative -- the sums of money inolved would determine whether a benefactor would consider it worth the argument ( and solicitors fees). As far as I know, this has not been tested and remains my, uninformed, personal opinion.
8 posts Page 1 of 1
Return to “Ask IVA Forum and Industry experts”

Who is online

Users browsing this forum: Why me and 6 guests