There are no age restrictions for starting an IVA. You are not too old as long as you can maintain the agreed monthly payments.
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- Are you too old for an IVA if you receive a pension?
- What if you retire during your IVA?
- Can you settle an IVA with your pension?
- What of you die during an IVA?
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Are you Too Old for an IVA if you receive a Pension?
Your age has nothing to do with whether or not an IVA is suitable for you. The key criteria is rather can you afford to maintain the minimum monthly payment which is normally around £100.
If you are already drawing a pension, this may be an advantage. This part of your income is unlikely to fall and as a result there should be no reason why you cannot keep up the agreed payments.
You may be receiving a pension but are still working. This may be the case if you used to work for the forces or police. Again there is absolutely nothing to stop you applying for an IVA in these circumstances.
If you feel your income is not sufficient to sustain monthly payments you could consider a Lump Sum Payment IVA.
What if you retire during your IVA?
A standard monthly payment IVA lasts for 5-6 years. If you are likely to retire during this time you will need to plan in advance how you will sustain your payments after you stop working.
If you know your income will fall this can be built into your original proposal. You pay one amount while you are working and then when you retire the amount can change. As long as this is agreed with your creditors up front there will be no problem.
If your income turns out to be less then you expected after you retire this does not mean that the Arrangement will fail. You will need to review the situation with your IVA company to see if your payments can be reduced.
It may be possible to reduce your IVA payment if you have an unexpected fall in income during the Arrangement.
Can you Settle an IVA with a your Pension?
It is possible to settle an IVA early if a cash lump sum can be made available. If you reach the age of 55 during the Arrangement you might be able to withdraw the cash required to do this from your pension.
You must discuss the figure will need with your IVA company in advance. You will normally have to pay an amount similar to the sum of your remaining payments. However in some circumstances this might be reduced.
Settling your IVA early with cash from your pension means you will not have to worry about maintaining ongoing payments after you retire.
Do not draw cash from your pension before you have agreed in writing with your IVA company that it will be used to settle your Arrangement. Otherwise it might be treated as a windfall.
What if you die during an IVA?
When you die your estate is normally managed by a solicitor and the Executors of your will. Before your beneficiaries receive any funds realised from your estate all debts that you owe must be paid.
If you are in an IVA when you die the full balance of your original debt becomes payable. In addition the fees charged by your Insolvency Practitioner and 8% interest on your original total debt from the Arrangement start date.
If the value of the assets in your estate (including your share in any property equity) is not sufficient to cover your total original debt plus costs and interest anything outstanding is written off. Your family members are not liable.
Need help deciding if an IVA is right for you? Give us a call (0800 011 4712) or complete the form below. The advice is free and without obligation.