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What happens if I get a financial windfall during my IVA ?

At some point during your IVA you may be lucky enough to receive a financial windfall. Although this could possible be from a lottery win, it is more probable to be from an inheritance of some description.

When it comes to your IVA you will find that there is usually a windfall clause so that any windfall payments received during an IVA are required to be paid into this for the creditors. You must make sure that you declare any windfall to your Insolvency Practitioner. Chances are that you would want to pay this money into your IVA anyway since the majority of people want to finish their IVA as soon as possible.

It is wise to always make sure that you check with your Insolvency Practitioner so that you are clear on what is and is not classified as a windfall.

The classification of a windfall

In general a windfall will be an amount of money or an asset that you receive that you do not need to live off of and that could be used to help pay your IVA. Examples include an inheritance or a lottery win or perhaps bank charges refunds or some compensation. You may also find that some will class a work bonus as a windfall depending on the amount.

A windfall will not normally include any overtime that you may have completed at work, a redundancy, or certain forms of compensation.

You may wonder why a redundancy would not be included and this is because the money is deemed to be required for living whilst you apply for other work. Compensation payments for personal injury and for loss of future earnings will also generally be excluded as well.

How much of the windfall has to be paid?

It is more often then not the case that you will be required to give all of your windfall to your IVA supervisor. Sometimes this may be any amount over £500 that has to be paid. You will of course only need to pay over the amount of your debt in full and any fees or interest that is due on that amount.