Do i have to pay my redunancy money to my iva ?

sourcrates

Hi,
I have had an IVA now for around 2 yrs, there is a chance i could be made redundant soon from my job of 12 yrs, what i want to know is do i have to pay any of my redundancy money to my iva fund ?, my plan is to go self employed if redundancy does happen so i will need my money for set up costs etc associated with any new buisness i may want to set up, plus i will be skint and i have a family and 3 kids to support, the money will be needed for living expences as well. any one know the legalities of this ?

thanks
rich

agincourt

I have been through this one myself so i can only advise from experience not the legalities. I had to hand over nearly all of my redundancy package minus living expenses whilst looking for another job.(rent etc.) I think you will find that it will be classed as a windfall and you will be expected to pay it all over minus money that you need to live on.Best speak to your IP to make sure what you need to do and discuss plans for self employment.

maxmycardagain

another minus point for IVAs

never mind they go on your history faster than a bankruptcy and last far longer. and visible for all to see on the IS website

Charco_2

Thanks, very helpful Max.

Sourcrates, your IP is almost certainly going to demand that you pay your redundancy into your IVA - HOWEVER, do it on your terms! What you IP says isn't the law, negotiate!

Check your IVA paperwork to see if it covers this eventuality and that's probably a good starting point.

There are two sides here so try to be fair.
1. You have to look after yourself and your family
2. You do still owe your creditors the money you borrowed so should still be trying to repay them

Inform your IP that redundancy is looking like an option now and see what he says (apart from pay up). Insist then that any redundancy payment is for you to live on until you find alternative work (no need to mention the self employed bit). Ideally you'd be wanting a payment holiday from your IVA until you get things sorted however you could simply agree to maintain your payments as they are whilst budgeting whatever redundancy pay you have for over the next few months. If there is any left after you get back on your feet you'd be willing to offer that into the arrangement... but there's no point paying it all in now just for your IVA to fail the next month because you've no income!

Alternatively, how much redundancy pay are you getting? Would it be enough to consider offering a Full and Final settlement to your IVA?

sourcrates

Hi,
Thanks for all the responces charco and agincour, your advise to negotiate makes a lot of sence, it does state in the paperwork that any redundancy money would be treated as a windfall and would have to be paid into the IVA there would be something like £8500 redundancy in total, not enough to offer a full and final im afraid, at the moment redundancy is just a maybe, my company is moving location temporarily and i am unable to work from there new premises as its 85 miles away, its a complicated situation which i dont want to go into any futher, suffice to say we have not had official notice as yet, it may not come to redundancy but it is a distinct possibility and i just wanted to know what my options were, thanks all.

rich

trudij

You might find that they will accept 8500 as a f&f - if the alternative is bankruptsy ( i know it wont - but they wont know that !!) .... might be worth looking into further, cos eitehr way you are going to have to declare it....

Choo_Choo_4

trudij wrote: »

You might find that they will accept 8500 as a f&f - if the alternative is bankruptsy ( i know it wont - but they wont know that !!) .... might be worth looking into further, cos eitehr way you are going to have to declare it....

You'll never know if you don't try Sourcrates ... you're already 2 years into the IVA and presumably have been a regular payer from the start.

Redundancy is a pretty big change in someones life and as far as your creditors are concerned it could very well mean bankrutpcy a few more months down the road if you were struggling to make ends meet. What's the worst they can say?!

Charco_2

DO DISCUSS IT ALL WITH THE IP THOUGH!

-You could ask for a payment holiday and add a few months onto the end of your proposal
-You could ask to make reduced payments for the time being with the intention of catching up later
-You could maintain your current payments out of your redundancy until you found long-term employment again (but then you would have to contribute the rest of your redundancy to the IVA again if there was any left - stick to your current budget!)
-You could try to offer the F&F (you never know) but bear in mind once you pay it all in you'll have nothing to live on until you find employment... partner help?

The sooner you discuss this, the sooner you'll know your options and what will be expected of you - even if you dont eventually get made redundant!

Good luck!

(It would be helpful to other posters on here to hear how you get on... also you can come back to discuss the options you've been given!)

***Remember circumstances change all the time... your IP is likely to have dealt with this type of thing a few times before, it's not unusual!

sourcrates

Very good advice, thank you all very much, its much appreciated,

my wife does work, but only part time, she is ex navy and was disabled in a work accident 8 yrs ago (the main cause for all our money troubles !!) we are in a better position than most in that we do not have a mortgage,(repoed in 2007) or need to pay rent as we live with my brother.

we would be able to claim max tax creds as we have 3 kids, overall we would be around £400 a month worse off if i lost my job, a lot yes, but we could manage reasonably well on that, its a fact that most of the fees for the IVA are taken during the first year, so theres not all that much in the pot just yet so i dont think a F & F would be an option at the moment but as you say, no harm in asking.

Theres an announcement at work on thurs as to what is happening regarding our depot so will update after that.

thanks again for all your advice and comments

rich :T

trudij

hope it goes well Thursday