iva and inheritance questions.

sg27_2

My husband is in an iva which is coming up to first anniversary. He has just learned of 50000 inheritance from grandparent.

Our questions are:

Would he be able to use 50k as full and final payment?

Is it possible that he could ask for daughters to inherit instead,(16 and 18) then for full and final to come as gift or loan from them, say 25k?

Iva details: business debt covered by personal guarantee. 6 debtors. He is paying 500 per month and estimated 30k from equity at end. This equates to 15p in £.

Only clause in iva re inheritance is 100% paid in, but nothing on how this affects his liability.

DorisTrousers

Is this an actual inheritance that is on its way already, or one that may become due to him but not yet as the grandparent has not died?

If it is on its way then it seems to me that it is inevitable that it has to go into the IVA pot, check the wording of his own proposal but I can't see any other result than it being captured under the "windfall and inheritance" clause. The monthly payments would still continue as normal. If not yet bequeathed then nothing to stop the grandparent leaving the money to whomsoever they wish. What they then do with it is up to them.

I am sorry if that isn't the answer you wanted, but an IVA is a way of paying back what can be afforded within a certain timescale, with advantages built in for both creditors and debtors, therefore the 15p in the £ was only ever an estimated return. If he can pay more than that during the IVA lifetime then that's the deal. If he wins the lottery whilst the IVA is live then he pays back 100p in the £ plus any costs. If he wins the lottery a year after it is finished he can keep the lot as the IVA is gone. This may just be a case of the worst possible timing I guess.

sg27_2

Thanks for the reply. It's a grandparent that died a year ago, had we been aware at the time that he was going to receive this, then it would have avoided need for IVA. His brother was unaware of position we are in and has offered to help with a loan to make a final payment to IVA, which is extremely generous of him. Husband has let IVA supervisor know this and of the amount being paid to him, so he is hoping they will accept this and it will bring things to an end. We have also made them aware that part of our mortgage is due to come to an end within 2 years and also that husband is in very precarious position employment wise as he works in local government consultancy and present contract ends in September. There are thousands of people doing this now since they have lost their jobs in local government, so likely he will have some time unemployed - nobody knows who is going to be in government either, so it depends what they decide about how local government is run. All of this we hope will convince creditors that this is their best chance to get any return on the debt.

DorisTrousers

Just be careful here. Your last post seems to hint (apologies if I'm wrong) that the inheritance is not being disclosed. Your husband has a legal duty to declare it to his supervisor, not to do so, and assuming it comes to light later, would lead to a very great risk of the supervisor bankrupting him.

If the inheritance is now out in the open, then a 3rd party offer of funds on top of that money may be acceptable, but probably only if it is very near to the equivalent of the remaining payments left and equity release lump sum when the time comes. That would be slightly different if he could no longer afford monthly payments at all, but if he can still afford the £500 per month mentioned then there is little incentive for creditors to accept closure unless they get "as near as dammit" but just a lot sooner. If the estimated equity release is £30k it is probably fair to say that there might be decent equity in the property. His creditors could decide that, in the event of failure later on, they could always pursue bankruptcy and get a return that way.

DebJack_2

Hoping for enlightenment as am totally befuddled with complexity of working out this problem!

I owe £38.5K in total to creditors. My IVA proposal (set up in 2012) is to repay £29.5K. I have paid in £23.5K over the past 2.3 years (which includes proceeds from a successful PPI claim) and have 2.7 years left in IVA. Monthly repayment is £491. An equity clause is included in IVA terms.

How much will it cost me to pay off the IVA this year if I obtain the means to do so via an inheritance?

Would I have to hand over my entire inheritance to IP and wait for them to work out a completion figure before sending me back the surplus or can I set aside or send them the sum required to settle and keep the remainder (if any)?

Would there be any benefit in getting an insolvency lawyer to negotiate with my IP regarding interest and equity clause on a full and final settlement offer rather than dealing with them direct?

Would be extremely grateful for assistance as am finding it very difficult and stressful to work out the answer to this puzzle myself. Thanks in advance for any help. And apologies if I have posted this in the wrong place!

DorisTrousers

DebJack wrote: »

Hoping for enlightenment as am totally befuddled with complexity of working out this problem!

I owe £38.5K in total to creditors. My IVA proposal (set up in 2012) is to repay £29.5K. I have paid in £23.5K over the past 2.3 years (which includes proceeds from a successful PPI claim) and have 2.7 years left in IVA. Monthly repayment is £491. An equity clause is included in IVA terms.

How much will it cost me to pay off the IVA this year if I obtain the means to do so via an inheritance?

Would I have to hand over my entire inheritance to IP and wait for them to work out a completion figure before sending me back the surplus or can I set aside or send them the sum required to settle and keep the remainder (if any)?

Would there be any benefit in getting an insolvency lawyer to negotiate with my IP regarding interest and equity clause on a full and final settlement offer rather than dealing with them direct?

Would be extremely grateful for assistance as am finding it very difficult and stressful to work out the answer to this puzzle myself. Thanks in advance for any help. And apologies if I have posted this in the wrong place!

From an inheritance, which is captured under the terms of an IVA, it will cost you the remaining £15k, plus statutory interest at 8% p.a. plus I.P. costs. Back of a fag packet calculations, and depending what monthly payments you are making, would see that, if you settled at 2 and a half years, at around £31k-£32k. That is my best guess from the limited info here.

In an IVA, if you are in a position to pay back the debts in full due to inheritance or similar, then you have to do so, and you (rather than, effectively, the creditors) foot the I.P bill also. Totally different answer if the funds are from a 3rd party such as friend or family who offers to settle earlier, as that money isn't yours