lump sum payment

geeka

hi guys,
i'm alot in debt (about 23k) and am on a debt management plan which was based on my old circumstances, they have changed now and are a little better, my creditors are happy with what i am paying and havent hassled me for a while. i'm thinking of doing an IVA but got a letter a week ago about a pension fund being wound up and i can have about 5k (3.8k after tax) in a lump sum (np point putting in my nhs pension scheme as i'd buy naff all extra years). i'm just wondering if i can take the cash, use it over 6-9 months to pay for stuff and then do an IVA to solve my debt problems. or could i get it paid to another persons account and they look after the cash?
i know its not really honest but is it legal?
thanks

rog2

I think that you need to bear in mind that an IVA is a form of Insolvency - similar in many aspects to Bankruptcy, but without the same effects on assetts, such as property.
In Bankruptcy, the Official Receiver will look at any money received and spent over the last two years (they do have the power to go back up to five years, but seldom do). If the OR feels that money has been fraudulently spent or stashed away, he has the power to 'reverse' transactions in order to release those funds for creditors. The 'bankrupt' is, at est, likely to end up with a BRO (Bankruptcy Restriction Order) that can extend his 'bankruptcy period. At worst, he can expect a possible prison sentence (very rarely applied).
In an IVA, the Insolvency Practitioner has an obligation to your creditors to 'maximise' all of your cash assetts, for the benefit of your creditors.
Whilst an IP may not have the same 'powers' as the Official Receiver, it is worth remembering that an IVA is a legally binding agreement and will be based on what you tell him. I would think that, should he later find out that you have 'knowingly' spent a lump sum in order to exclude it from any IVA, he would be, let us say, somewhat less than happy.

geeka

hhmmmm, not sure what to do then.

i could try and use the money to settle two of my debts, what sort of settlement figures do they accept ( i have 3.5k, 10k and 8k credit card bills) reckon i could offer 3k for the 8k one and maybe 1.5k for the 3.5k one).

that wud leave me with 10k debt which is managable.

rog2

geeka wrote: »

hhmmmm, not sure what to do then.

i could try and use the money to settle two of my debts, what sort of settlement figures do they accept ( i have 3.5k, 10k and 8k credit card bills) reckon i could offer 3k for the 8k one and maybe 1.5k for the 3.5k one).

that wud leave me with 10k debt which is managable.

It is a dilemna, geeka, as if you do that, it could be seen, by your other creditors, as giving 'preferential status' to those two creditors.
Why not discuss it with your DMP manager?

geeka

i would ramp up my payments to the other and get rid of them, it is a dilemma. i'll re-ring the cccs and chat to them, they should be able to give me the best answer. frustrating.