IVA and Inheritance.

cheeseoatcake

Hi all,

I recently got some advice from SC who put me on to Grant Thornton.

After 2 decades of juggling credit cards, loans and remortgage's.
The debts have kept growing and now I'm heading towards 50 I've had to admit defeat and except I can't make the payments.

An IVA has been recommended so I'm awaiting the draft proposal.

My question is my parents have scrimped and saved all their lives never having much in the way of luxury or holidays.
They're not impressed with my financial situation and have decided to change their Will and leave any money to my daughter who is 12 yrs.

They are in their late 70's and not too well. If anything happens to them during the term of my IVA will this cause a problem.

Also if my wife had windfall would this come into the equation, she isn't named on any of my debts and is not included in the IVA.


Thanks for any help.

Foxy-Stoat_3

Firstly, well done for facing up to the problem...once you sign and start on the road a massive weight will be lifted from your chest.

As your Wife or your 12 year old have anything to do with the IVA then this won't have any impact, but check the contract before you sign.

If you were to receive a windfall, that would have to be paid into the IVA.

Before you start I would do the PPI refund thing first though.

Good luck

longtermplanner

Agree with Foxy that your daughter inheriting won't affect your IVA at all - you may feel rather hurt by your parents decision, but actually this is a pretty sensible rout for them to take.

re your wife having a windfall. no that wont affect your IVA directly. But if she does, then it would probably be sensible not to use it to pay off any of your mortgage until your IVA finishes, or you might get caught by IVA remortgage provisions that might otherwise fail. You could in theory pay off some of the mortgage and then have an argument with your IP about how much of the equity belonged to your wife, but I would prefer to KISS and avoid the problem,

cheeseoatcake

Thanks for the replies,

I'm hoping there's no inheritance for a while, I'd much rather have my parents around.

I did email the question to GT and its took 4 days for a reply with a simple yes any inheritance would be included.

Kind regards

cheeseoatcake

UpToMyNeckInIt

GT want your business, and it takes 4 days to respond to a simple query like that?

That should be a warning about the level of customer service you can expect.

Have you sought advice from any other IVA companies?

Well worth doing so, because you cannot switch firms once your IVA is in place.

cheeseoatcake

Thanks for the reply,

Only spoke to stepchange then GT next thing i was emailed an engagement pack which I e-signed and sent back.

Rushed in with clouded vision under the stress of it all.

It all sounded so simple with the initial telephone meeting with GT and the looming credit card payments that i couldn't pay were making me ill.

I take it I'm tied to them now.?

Find_The_Real

Hello Cheese and welcome. You should not be tied into any company in the initial stages and you are free to contact any other providers for advice. Most should offer this service with out any fees. It is always worth contacting 2-3 providers as the advice can very much vary. I have been lucky in that my IP has always replied within hours to any questions.

It is important to go with a provider you are happy with as 5 years is a long relationship to have with a company - if you google 'IVA company reviews' it should give you a number of results to get an idea of who to seek advice from and who to avoid! Obviously everyone has different opinions out there but you can tend to get a good idea.

I can appreciate the need of wanting to do something when stressed but it is important to research all the options before deciding to commit.

As for the inheritance issue, if you are not named in the will then there will be no issues of having to pay anything into the IVA. I think it is very sensible of your parents to take this route, I went through the same discussions with my elderly parents and I was more than happy to be excluded as I did not want my creditors to gain from that.

My advice is although it can be stressful and worrying, take your time to consider all your options and do speak to a couple of companies. Having gone through a house repo, DMP and now IVA, I can assure you that being in debt is not the end of the world and there are options out there, just don't rush in and take the first life line that is thrown to you.


Good luck and wishing you all the best.

cheeseoatcake

Hi all,
A quick update.
Nearly at the 2 year point with my Iva.

My parents are now sorting there affairs out and whilst I'm still excluded from there will they wanted to help my wife out with a gift of £5000 or so as she's helping them out with daily activities, cleaning etc. She was hoping to put it into premium bonds for a future rainy day fund.
She's not named on my Iva.

Would this cause any problems?

sourcrates

cheeseoatcake wrote: »

Hi all,
A quick update.
Nearly at the 2 year point with my Iva.

My parents are now sorting there affairs out and whilst I'm still excluded from there will they wanted to help my wife out with a gift of £5000 or so as she's helping them out with daily activities, cleaning etc. She was hoping to put it into premium bonds for a future rainy day fund.
She's not named on my Iva.

Would this cause any problems?

None whatsoever, your IVA only affects you.

However it may be wise not to put it through the bank account you use, just to avoid awkward questions at review time.

cheeseoatcake

Thanks for the reply.

Would any gift be subject to inheritance tax if my parents were to pass away in the next few years?

Regards

dragonsoup

cheeseoatcake wrote: »

Thanks for the reply.

Would any gift be subject to inheritance tax if my parents were to pass away in the next few years?

Regards

Probably not.

You can gift £3000 to an individual in each tax year which is exempt from IHT. This doubles to £6000 if you didn't use the concession in the previous tax year. This applies to both your parents so they could potentially gift up to £12,000 with no IHT implications.