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IVA : What Happens If I receive A Windfall Payment during my Individual Voluntary Arrangement?
When in debt, and you are in either an Individual Voluntary Arrangement or a Debt Management Plan, its natural to dream of a large windfall payment to clear your debt.
We all hope that one day our numbers will come up on the National Lottery so that all our financial problems could be solved. This of course is not very likely to happen with the odds of a large win at 14 million to 1, and the fact that the more common £10 win for three numbers wouldn't settle your Individual Voluntary Arrangement or Debt Management Plan.
There are of course other routes to a win of some sort, probably with not such big
pay-outs but definitely more likely.
In reality though, most people are only ever going to receive a large cash windfall through the far sadder circumstances, through an inheritance as beneficiaries in a will.
If in these circumstances, you are in an informal arrangement, i.e. a Debt Management Plan, what you do next is up to you, because you are not obliged to inform your creditors of your windfall.
However, logic would suggest that should you not have more pressing commitments, paying your debt either in part or in full, would be the most sensible option. This is because you would immediately be saving any late payment charges and interest payments due on the debt.
In an Individual Voluntary Arrangement however, this choice would almost certainly not be open to you. The reason for this is that, almost without exception there is a standard clause in every Individual Voluntary Arrangement proposal, that says you must pay off as much of your debt in circumstances where you have benefited from a windfall payment.
This of course is what most people in an Individual Voluntary Arrangement want to do any way, and the prospect of finishing their Individual Voluntary Arrangement early is usually a welcome one.
If you have a debt problem and you would like to discuss it with an experienced debt adviser call 0800 088 7503.
Alternatively why not visit myIVA-Adviser.com and download one of our many Individual Voluntary Arrangement guides, designed to help you decide what solution is best for you.
