Life Insurance Claim

Hi All,

18 months ago I had my first really bad relapse which knocked me off my feet. It resulted in me having to go part-time. I couldn’t afford my debts so entered an IVA (volountry arrangement) with my creditors for £16,000. I had no choice and was mortified as I’ve never before missed a payment.

After LOTS of poking and proding they’ve finally diagnosed me with MS in February 2012.

I have critical illness cover on my life insurance so claimed for MS. The £100,000 would definately help take the stress off and is due to be paid next week.

Well today I rang the IVA company to tell them I wanted to settle my IVA and was totally honest about why. It turns out there’s a clause saying I have to give them ALL the money even though this is £84,000 more than my IVA. I’m at my wits end.

Does anyone know what I can do? Please help.

You need to seek legal advice. At the very least consult with CAB who will be able to recommend a solicitor if that is appropriate.


Hi, As I understand it, after a VERY quick Google (so don’t treat this as gospel), it is a standard contractual clause that you have to hand over the FULL value of any “windfall” to the insolvency practitioner. However, this is only a temporary measure, as the balance will be returned to you after the satisfaction of the debts. This is to ensure the creditors get first priority, and you aren’t allowed to spend your slice first, and then say: “Sorry, there wasn’t enough for them”. Tina

thank you all for your help. Much appreciated x