Iva and redundancy

alice43

My husband and i are only 2 months into our Iva and he has just been told he is being made redundant.We are due to pay our creditors £17,000 over the 5 yrs.He will be getting £18,000.We are wondering about a f +f payment and have a telephone interview tomorrow. Do we have to offer the full £18,000?Any advice greatly appreciated.

Charco_2

no do not offer the full £18k

You are going to have to vary the proposal - this will require a new creditors meeting to consider your new offer.

Draw up a reasonable budget based on the I&E you are currently working from... now consider that from your the date of your husband's redundancy until he can find a new job you will be relying on just your income. How much short will you be each month?

Allow at least 6 months of this - so you're going to want to hold back a couple of grand for that!

alice43

Well interview went fine, but they did state that creditors may accept our f+f offer but if we keep 6 mnths of my husbands salary they could get us to continue with iva payments for 6 mnths.My husband earns £1200 a month, redundancy will be £18000 so 6 x 1200 would be £7200.So instead of offering £18000 - £7200 we wondered if we should add our 6 mnths iva payments onto our offer? making the offer £13000?confusing i know!!but we confused ,though prob no right answer!!

Charco_2

Your IP is not wrong I suppose, but he's not 100% right either. This is a negotiation - it's about you offering what you think is reasonable, your creditors demanding what they think is reasonable and you agreeing on a figure that keeps neither of you too happy!

If you hold back a full six months wages then your creditors MIGHT think to ask you for ongoing contributions... but that's not what you are offering! You want to offer a one off, full and final, call it a day, lump sum amount and start anew. If you make a lump sum payment from the redundancy and then maintain ongoing repayments for six months and your husband find work within that time... then why woulodn't your creditors ask you maintain ongoing repayments for the full five years...

You want to agree something now, set in stone, that's the end of it.

Remember, although your IP is trying to help you to solve your debt solutions, it's only natural that they are going to have an eye on their fees too... the more you repay, the more they'll earn (because most IVAs are now agreed on a %age of realisations basis). Even the most ethical of companies with honesty written through them like a bar of rock will allow themsleves a cursory glance at the bottom line!

So come up with a reasonable figure - then shave off a grand - and make your offer! It's not up to your IP to accept or reject it, its up to your creditors.

The way I would look at it (as a starting point) is not simply to keep six months worth of your husbands wages because that is obviously more than you'll NEED, but... you will need something!

According to your IVA, how much is your household spend? (The total of your expenses on the I&E).

From this monthly figure, subtract YOUR monthly income. This is the amount you will be short each month until your husband finds gainful employment again. Multiply this by six because that is a reasonable outside timescale for job-hunting (hopefully it wont take so long).

Subtract this from the £18,000 and how much is left?

alice43

Thanks Charco that makes a lot of sense.I have looked at the figs and we be about £1000 down each month so that would make our offer £12000.
All been put on hold today as our house (which we voluntarily handed back last year)has just been sold. We are in neg equity with it of approx £15000. So i think i am right in saying we be better to continue making iva payments til we get a shortfall fig from bank???