Divorce settlement & IVA

latte19

I took out an IVA in January (due to debts caused by marriage separation). I owed £15k. It is looking likely that I will receive £15k in my divorce settlement - will IVA take all of this? I have legal fees to pay (around £2-3k) and I currently have no car and need to use that money. I have 2 children and a car is essential.

I understand I have an obligation to tell the IVA when I receive money over £500 but can the amount paid back be negotiated or is there a set percentage etc? 

Any help would be good. My IVA will run for years so I can’t hold the money until the time limit has passed.

Thank you. 

mwarby

It’s almost certain that whatever is left rafter legal fees will be taken by the IVA as it would count as a windfall

You should discuss with IVA company, but I’d expect them to want it all

You also sadly can’t really opt to wait either (or else everyone would, which renders the windfall provision pointless). If you did and either lawyer or IP caught wind you’d be in trouble to some degree

The pro is the lump sum might reduce the IVA duration, but that depends on how much your debts were

latte19

I had £15k debt so say £13k left after legal fees and it would all go on the IVA then? snookered either way. I hope the house sells for more so I’m left with something 

latte19

Google says “ A windfall is any sum of money you receive during your IVA over and above your expected income. If you get any money like this 100% of it will normally have to be paid into the Arrangement. Common examples of windfalls are an inheritance payment, lottery win or compensation for mis selling or personal injury.”

Would there be room to negotiate that a divorce settlement is based in the fact the money is to provide for my family to even up the assets and it isn’t a windfall?

fatbelly

I'm not sure that quote is completely correct. Compensation for personal injury would normally be excluded.
Other than that, the windfall (set percentage is 100%) has to go to repaying your creditors, the IP fees and interest.
It is only 4 months since you started your IVA. Did you not see this windfall coming within the 5 years? 15k is not very much debt for an IVA. Did you get advice before commencing this? You're sure you're not in  a debt management plan?

mwarby

latte19 said:

I had £15k debt so say £13k left after legal fees and it would all go on the IVA then? snookered either way. I hope the house sells for more so I’m left with something 

you have another 2-3k of IP/IVA fees, so you'd be very close to it being finished.

latte19

fatbelly said:

I'm not sure that quote is completely correct. Compensation for personal injury would normally be excluded.
Other than that, the windfall (set percentage is 100%) has to go to repaying your creditors, the IP fees and interest.
It is only 4 months since you started your IVA. Did you not see this windfall coming within the 5 years? 15k is not very much debt for an IVA. Did you get advice before commencing this? You're sure you're not in  a debt management plan?

I wasn’t able to keep up the payments (due to health and not able to keep my job) so I had no choice but to seek help at the time. The divorce has went on for longer than I thought because he was messing about and ignoring our solicitor correspondence and deadlines etc. Now he is in a position where he also needs the money (to pay for his next wedding) and that’s why the ball is rolling again. 

It’s definitely an IVA I have and to be honest it was a God send. Still is even if I have to pay it back. Being debt free would be lovely again.