Redundancy payments

squidward_2

Hello all, my friend (honest) has credit card and personal loan debts totalling about £40,000, he has negotiated (temporary) reductions on some of the monthly repayments. He may be about to receive a significant redundancy payment, does he have to immediately inform creditors and clear as much as possible straight away?

short_bird

My question would be: what's he going to live on till he gets another job? As far as I know, someone made redundant needs to sign on for national insurance purposes but is unlikely to get benefits due to the redundancy payment. However, a trip to Citizen's Advice would be a good thing to check the legalities.

McKneff

Shortbird, you are mistaken. You can be made redundant on a Friday and claim JSA from the following Monday. Simple as that really,
you wouldnt be able to claim any means tested benefits but thats understandable.

I dont think its advisable to spend all the redundancy on clearing debts because this could be classed as 'deprivation of assets' if he did apply for housing benefit etc. he would be refused and treated as if he still had the cash.