Summary: This article reviews what happens to windfalls in relation to an IVA and how much can be expected to have to be paid into it.
Any windfall received by a someone in an Individual Voluntary Arrangement (IVA), such as inheritance or a lottery win, will need to be paid into the IVA. It is vital that the IVA Supervisor is notified immediately of any additional income or windfall so that the amount can be calculated. Not notifying the IVA supervisor could result in the IVA failing as it would be a breach of the terms.
How much of my inheritance will I have to repay into the IVA?
This will depend on the amount of the inheritance or windfall. There is usually a specific clause in the terms of the IVA as well that will specify the details, but as mentioned above, it is usual for 100% of any windfall to be paid into the IVA.
Is it possible to delay payment of my inheritance until after the IVA ends?
While it is possible for an inheritance to be held in a trust fund, for example, until a specific date, it is likely that part of the inheritance will need to be paid into the IVA at some point as per the terms. When an IVA is completed, a certificate will be issued to confirm this. However there can be a delay between the final payment and the certificate being issued, and during this time, additional payments can be requested. In the event of a 'delayed windfall' it is likely that the certificate will not be issued, and the IVA completion date will be delayed.
Do I have to tell my IVA supervisor of my inheritance if it is held in a trust fund until after the IVA completion date?
It is strongly advised that all aspects of finances are discussed openly with the IVA Supervisor. Failure to do so could result in a failure of the IVA altogether. In the event of an inheritance or windfall, even if it is held in a trust account until after the end date of the IVA, it could still be considered an unrealised asset, and therefore still fall under the terms of the IVA.