When someone enters an IVA they are agreeing to repay a percentage of their debt over 5 years but what happens if they come into additional money?
Despite the IVA document, which is signed by the person entering the formal debt solution, outlining what will happen there is still too much confusing.
Whether someone earns extra money from overtime or wins the lottery they will likely have to pay extra into the IVA however the amount could change.
If someone wins money from the lottery or other form of gambling the insolvency practitioner who manages the IVA will likely ask for the full debt and fee to be repaid.
Of course this will depend on the amount which has been won and whether it’s sufficient to repay the full debt and fees or if it’ll just go to pay some of it.
If someone earns additional money from overtime they will be asked to pay 50% of it into the IVA but it’s important to tell the IP as soon as it’s earned.
A lot of people who don’t mention they have earned extra money have found out the consequences can be serious as they will have to repay it.
In an IVA the monthly contributions can increase as well as decrease depending on whether someone’s income or expenditure changes.
If someone begins earning additional money on a regular basis their income and expenditure should be re-assessed and contributions should be adjusted.
When someone receives an inheritance it’s treated the same as gambling winnings and the insolvency practitioner will require it to be paid into the IVA.
If someone comes into sufficient money the insolvency practitioner will require all debt and fees to be repaid from the inheritance.
Honesty is always the best policy once someone has entered an IVA because the insolvency practitioner can and will request bank statements.
These statements and other financial documents will likely show any additional money which will mean the IP is duty bound to have it repaid.