If you do receive an inheritance of more than £500 during your IVA, then you may not be able to keep the funds. The money will be used to pay off your debt.

How is Inheritance Seen In Terms of an IVA?

Inheritance is seen as a windfall. If you receive this during your IVA, then this has to be paid to the IVA company according to the arrangement you have with your creditors. If you are written into somebody’s will and they pass while you are part of the plan, then you will need to transfer your money to the IVA company. Your creditors will receive more, and this can sometimes lead to your debts being paid in full.

If your debts are not paid in full, you will however, need to make sure that you keep up with your monthly IVA payments. You cannot hide the fact that you have received inheritance from your company. The solicitor who is in charge of dealing with the estate itself is obligated to inform the IVA Supervisor. Not doing so would involve them breaking the law.

Is it Possible to Keep Some of My Payment?

A lot of people wonder whether they are going to be able to keep any of the inheritance that they have received during the IVA.  The rules say that you should pay any money that you receive over £500 into the Arrangement. That being said, your insolvency practitioner may be allowed to let you keep some of the money. Usually, this is only the case if they feel as though you have a reasonable use for the money. You may need some cash to repair your car or if you have home repairs that need to be done.

That being said, this will usually depend on the circumstances regarding your situation and may be subject to creditor approval. You need to make sure that you do not spend a penny of your money before you have an agreement with your insolvency practitioner. If you do spend some of the money, then you could breach the terms of your agreement.

Can I Pay Off My IVA Faster By Using My Inheritance Money?

When you pay your inheritance into your IVA, you probably won’t get it paid off any faster. You will have to keep on making payments until you have reached the end of your agreement. The inheritance money will simply increase the amount that is paid off your debt. The amount that is written off is then reduced.

The only time you will be able to pay your IVA early is if you have received a substantial amount of money. There would have to be enough to pay off your original debt, plus the fees that the insolvency practitioner is charging. In some cases, you will also need to pay off the statutory interest, which is 8% of the debt, from the first day of the arrangement, although some IVA terms may have removed the requirement to pay this. If you can meet these requirements then the agreement would come to an end immediately, meaning that you would no longer need to make the monthly payments.

Can I Avoid Starting an IVA If I Am Due an Inheritance Payment?

If you receive a payment before you begin your IVA, then the inheritance will be yours. You can do what you want with your money, and you can even use it to pay for any pressing expenses, however, you should still make sure you tell your IVA company as creditors may need to be notified, and creditors may request that part or all of it is paid into the IVA if you have the funds available. The one thing that you shouldn’t do if you intend to start an IVA is pay off a selection of your creditors. This is especially the case with friends or family. The main reason for this is that it may be considered to be a preferential payment, and it could result in your IVA being rejected.

If you suspect that you are going to inherit some money but you don’t know when, then delaying your IVA may be a good option, so you can consider your options. Your creditors will still be able to contact you, so making an informal arrangement with your creditors or using a debt management plan could be wise here, so that you can control your debts temporarily while you wait for your payment to come in. Where inheritance is possibly due in the future, you can consider bankruptcy. You would usually be bankrupt for a year, and the money would only be paid into bankruptcy if the individual dies during this time.

Will My Inheritance Be Impacted By My IVA?

If you receive an amount of cash or even an asset worth more than £500 while you are in an IVA, then you will be expected to put this towards your plan. There’s usually a windfall clause in the contract that outlines this. When you have received your inheritance, it is your duty to inform your IVA company.