IVA and Inheritance

sillysausage1977

This is just a hyperthetical question im aware that whilst in IVA any extra money that you may come by whether it be a winning or by inhertiance needs to be declared to your IVA company but do they have a way of actally finding out if you have come into some or is it just by you being honest with them?

Thanks.

bernard828

Your IVA firm aren't psychic. However you'd be wise the remember the following: firstly, you might be asked to provide bank statements to prove your income and if you withold them you might be in breach of your IVA. You don't want them getting suspicious.

Secondly, any competent IVA firm will have included in their proposal a specific provision stating that you absolutely have to declare any winnings or inheritances above a certain level. Regardless of whether they will definitely find out about it, not declaring it puts you in breach of the arrangement, which is a tad risky, don't you think? (Even if the chances of them finding out are slim)

To put it really simply, put yourself back in the real world. What's the first thing you'd do if you got some money and you weren't in an IVA? You'd pay the debt off, right? So why are you behaving differently just because you are ion an IVA, when you might be able to pay the IVA off early?

By the way, the chance of you actually being able to do this are at least 5,000-1!

Charco_2

You're just better to prepare for any situation whereby you might inherit a large sum of money or an asset of significant value.

Ask to be removed from any will of any relative who is likely to include you in their will. They could put anything they wish you to inherit into a trustworthy relations name who could hold onto it for you until your IVA has been dealt with.

As for winning a large sum of money... if it's down the bookies and they pay you in cash then no, I dont suppose they'll have any way of finding out. If you win the lottery then i suppose you'll probably be able to repay your debts in full and still have a handsome sum left over so that might not bother you too much

robbies_gal

just wondering could an inheritance be offered as a full and final payment if you wanted to end an iva early?

and how quickly would youre credit rating get back to normal or would it still be the 6 years

judojub

Hi gabby.
Not sure about the inheritance side of things but your credit rating would still remain the same for the 6 years.

judojub

Actually I think ( and I am sure somebody will correct me if I am wrong) unless the inheritance is enough to pay off all your original debt plus fees then it would be classed as a windfall and all of it would be captured into the IVA. This would be different I think if it was an inheritance via a third party!

FoggyBrain_2

Basically correct, Judo, except that you might be able to keep the first £500, if this is written into your proposal and, as well as fees some proposals allow statutory interest (currently 8%) to be added (mine, however, specifically excludes interest).

If it was a third parties inheritance it would have no effect on your IVA if they were offering a sum in F&F, until that offer had been accepted. However, if they were "passing on" a cash gift that they had inherited on your behalf it would, again, become a windfall, unless, of course they held it in unofficial trust on your behalf until the IVA had completed (not strictly kosher).

robbies_gal

thanks for the replies-so you couldnt offer it as a lower sum for f+f anyway

FoggyBrain_2

No gabby ... the creditors would be getting it anyway.

garwil

Hi Guys
I am very interestd to read this.
I am about to go into an IVA and i asked our iva company about this senario - i am named as a benficary when a family member dies - basically i will inherit 1/3 of this persons home. I asked the IVA company about getting my name removed form this and replacing it with a close family friend who would hold it in trust for us until the iva was finished. The company said this would not be advisable as my creditors would knwo that i had changed it before i entered intot the iva and could still demand it to be paid into the iva.
surely this cant be?????
would another way out of this be not to sell the house while the iva is in operation and just hold onto it and thererfore i would be getting no money???
I must stress that i hopethis dear person does not die for a long time yet - but this is the worst case senario!!!

Charco_2

Have your name removed from the will!!!

Who is your IVA company?

If needs be ask if they could replace your name with the name of your children or partner or even just have your name removed altogether.

If you suddenly acquire an asset you will be required to address any value in that asset - refusing to sell it would not be acceptable and your IVA would fail. If you acquired an interest in this home due to the untimely death of a family member or friend then the other two people who inherit (you said that you get 1/3) would also have to sell ujp or otherwise buy you out, causing problems all around!

Since you will not then receive any benefit from inheriting the house anyway, then do everyone a favour and have your name removed from the will so that you do not inherit! You can have your name reinstated when the IVA ends and your friend or family member is still alive. Or as i said above, replace your name with the name of a trusted friend or member of the family who will see that you get yours AFTER the IVA has been settled - don't put the inheritance in trust!

THAT GOES FOR EVERYONE ENTERING AN IVA!!!!*** If it is likely that you are mentioned in someone's will, take steps to have yourself removed - don't be embarrassed to discuss the reasons either, you know the person who has named you in their inheritance loves you and wants you to benefit if they die, but they don't love HSBC or HBOS or Northern Rock so don't leave it to chance that your inheritance lines their pockets... better simply not to inherit if that is the case
(Or even if you have an elderly family member has no will but you would inherit in the event of their death, ask them to draw up a will which excludes you - they can leave less legal instructions with someone they trust to sort you out after your IVA if they wish... they can also draw you back into the will if they are still around after your IVA has finished!)

*** And indeed anyone currently in an IVA... try not to be too loved by family and friends - it would be awful if they left you the farm and you had to give it to your creditors when it would have been so easy to avoid that!