IVA advice needed

tesdelguy

Hi all. 

So in 2017 I entered into an IVA, I feel stupid for doing this now as it was only for £7000 worth of debt and I’m paying back over £10000.

Anyway, I’m in my final year of paying back now and I am about to receive a windfall of over £40000 a few months before the end of the IVA.

I’m just trying to figure out the best way to go about paying all of the IVA off and what the process will be, will they take the whole £40000 off me and put it somewhere else to pay off the remaining debt (£1700) then take more money from the windfall before returning it?

I should add that I am paying 100p in the £ plus fees and the £1700 would clear all that. 

Would it be possible to get the windfall to be given someone else who could then gift me the amount I need to pay off the IVA in full? 

To be clear, I’m not trying to shirk any of my debt, I want to pay it all off I just don’t want to lose more of the windfall than needed when I’m already paying over £3000 in fees to the IVA company.

Thanks for any advice in advance.

C 

sourcrates

You know what, and I`m just playing devils advocate here, in your situation, I`d be tempted to just let your arrangement fail, then once the dust has settled in a year or two, just settle up the remainder of the debt, that way you get to keep almost all of your 40k.

You see, if you just stop paying your IVA, eventually it will fail, there won`t be a penalty for this, in theory your creditors could make you bankrupt, but that is very unlikely, they will get some form of pay-out from what you have already paid to the arrangement, the rest will just revert to debt collection, you can then make offer`s to settle the lot.

Your credit file won`t get any worse, and the whole lot will drop off next year anyway regardless of what you do, and you know what, I would not feel bad about it, its quite obvious you were advised wrongly to take an IVA in the first place, due to the low level of your debts.

This way you get to regain control, pay off what you owe, and to keep your windfall.


Or, you could follow the rules and inform the IP of your windfall, they will then most likely take the lot, settle all the debts, and the fee`s and what`s left will be returned to you.
What to do.

[Deleted User]

Am I missing something here? You say you still owe £1700 but your windfall is £40000. Why would they take all of that?

JCS1

Where is the windfall coming from?

tesdelguy

The windfall is coming from my aunties estate, it’s all being paid out to my sister and she is then going to distribute it across the relevant parties. 

tesdelguy

[Deleted User] said:

Am I missing something here? You say you still owe £1700 but your windfall is £40000. Why would they take all of that?

I was thinking the same but I’ve read some horror stories online.

Could anyone explain more please? 

Thanks 

C

JCS1

That is what i feared.i believe an executor has to check the insolvency register and then legally has to pay to your IP. It might be worth checking as my knowledge in this area is several years old

fatbelly

tesdelguy said:

The windfall is coming from my aunties estate, it’s all being paid out to my sister and she is then going to distribute it across the relevant parties. 

Is your sister the executor or is she the only named beneficiary?

tesdelguy

She is the executor.

tesdelguy

What I don’t understand is if I owe £1700 now and I’m paying 100p in the £ then how can the amount be so much as to take away most of £40000?

sourcrates

You won`t lose it all, as you are paying back 1.00p in the £, so you will be liable for the remaining debt outstanding, now this is where it gets complicated, plus any interest and charges that could have been levied within the last 5 years, it all comes back on the table you see, this can amount to a lot of money, and can eat into your windfall.

I`m not certain if the re-instatement of interest and charges is at your IP`s discretion, or not.

There is also the supervisors fee, the nominees fee, VAT and any other charges associated with your arrangement.

However, you will have paid most of those fee`s via your monthly repayments.

IVA rules say you must pay the entire windfall to your IP, they will then disburse this money, and should give you back any remainder, the problem in the past has been where a company has held on to the money for longer than necessary, on some occasions years, a lot of IVA companies are far from legitimate unfortunately.

In your case, your probably lucky that your debt was only 7k, most IVA`s are for much larger sums, which would have swallowed all your 40k and more, yet I would still urge caution, contact National Debtline and run your situation past them, see what they think before mentioning any of this to your IP.