IVA and redundancy

runningfool

Hi

I have recently been made redundant and am getting a small payment. My contract with my PayPlan IVA states that if it is more than six months net of my monthly salary I may be liable to further payments. Fair enough.

However, my redundancy is nowhere near that amount, however they are still saying that if I get a job it may be taken into account pro-rata.

There is absolutely nothing in my contract that says that, it just talks of the six month amount - and when I argued my case I was told that although it isn't written in, it is 'intended'. Surely this is just making up the rules as they go along!

First I was told by them that redundancy is to live on (it doesn't say that in the contract), then I was told that if I get a job it becomes a windfall (it doesn't say that in the contract), then finally the 'intended' comment.

This cannot be right surely? What they are leading me to believe is that I might as well take the time off and live on the redundancy rather than look for work - or get a worse paid job as they might take any extra I get from a better paid one where I will have to work harder (for the same meagre living allowance). It doesn't make any sense. My debt was incurred through no fault of my own and I find it incredibly hard to live on my allownce - even though it's all written down they won't let you really be realistic on the living figures - and there's always something that crops up, that's life.

I want to better myself, am doing everything I can to let my debtors have at least some of it back - I could have declared myself bankrupt - and was hoping to be able to pay back what I owe family with my redundancy, as well as get a cheap car as I need one. Many people with IVAs have cars - and they can add it to their living allowance.

Surely they cannot just change the rules? As far as I am concerned I have worked really hard and lived on nothing for so long, and redundancy is compensation for losing my job - and it is nowhere near the threshold allowance in my contract, bottom line.

Can anyone advise me please - this is causing me a huge amount of worry.

Many thanks

UpToMyNeckInIt

Well worth fighting your corner: As you say, if it isn't in the contract, then it isn't in the contract!!!

Getting a car is probably sensible as well: You may require one for commuting to your new job (hope you find one soon by the way).

I've got to say though, that I was aware of the 6-Month provision, but I am not sure what happens if you find a job within that time.

If you are fortunate enough to find a better paid job, you are usually allowed to keep 10% of any increase in net pay, then pay 50% of any extra into your IVA.

Good luck - especially with the job hunting.

runningfool

Thanks so much - the 10%/50% thing is really good to know. I am going to try my hardest as there is nothing in my contract that even mentions anything to do with getting a new job in the redundancy part. They really do seem to be making it up as they go along.

FiatFan_2

Sounds like my iva co are singing off the same hymn sheet. I'm entitled to 8wks redundancy (2months) so I'd live as normal for 2 months then if no work found take a 6month payment break. If I find work within 2months then they pro-rata the redundancy as a windfall instead, unless I've spent it already.

Sounds to me like I might as well try have 2months off before starting a new job, if i do get made redundant.

Hope you find one soon

runningfool

Thanks FiatFan - don't blame you! It's crazy - even though we are doing all we can do do the right thing and pay back at least some of the money to our creditors, rather than going bankrupt so they get nowt, we're not supposed to better ourselves really - losing 50% of any extra if we get a better paid position (which means working harder). Wish I had just gone bankrupt if I am honest. Can I do that?

My major problem is this making up the rules on the redundancy - I am not sure where I stand legally you see, if I try and fight it. Bottom line- it's not stated in the contract as far as I'm concerned, but is there a loophole I am missing?

ami66

UpToMyNeckInIt wrote: »

Well worth fighting your corner: As you say, if it isn't in the contract, then it isn't in the contract!!!

Getting a car is probably sensible as well: You may require one for commuting to your new job (hope you find one soon by the way).

I've got to say though, that I was aware of the 6-Month provision, but I am not sure what happens if you find a job within that time.

If you are fortunate enough to find a better paid job, you are usually allowed to keep 10% of any increase in net pay, then pay 50% of any extra into your IVA.

Good luck - especially with the job hunting.

Be careful about the 10%/50% rule.

I have that in my IVA contract but it only applies to Overtime or Bonus. As my pay has increased on a permanent basis I'm having to do the whole I&E review and my increase is not even 10%.

Sluggy

Hi,

If the IVA companies didn’t say this, just imagine how this rule could be miss-interpreted to the more unscrupulous people out there.

Imagine someone who takes or is forced to take redundancy who is offered another position immediately.

If that person was allowed to keep what ever redundancy they received there would be thousands being used for other purposes, instead of being paid back to their creditors.

It’s simple plain logic to me. If you get 6 months worth of salary, use that to live on. If you get a job sooner, there will be a surplus and you will be expected to pay that into your IVA. Horrible but true.

I’ve just had a 2K bonus at work (for the first time in 3 years) and had to pay over £800 into my IVA, four times my monthly payment. I’m not happy about it but they are the rules I agreed to.

So far I have found My IVA Company totally inflexible on any payments owed to them. Even a massive car repair bill just before Christmas that wiped out most of our Car, Contingency and Gift Fund wasn’t enough to persuade my Case Officer to let me keep their portion of the additional overtime I’d earned.

They just tow the line, it seems unfair. But rules are rules.

UpToMyNeckInIt

ami66 wrote: »

Be careful about the 10%/50% rule.

I have that in my IVA contract but it only applies to Overtime or Bonus. As my pay has increased on a permanent basis I'm having to do the whole I&E review and my increase is not even 10%.

...good point ami66.

I ran this past my IVA company on a 'what if' type basis, and they said it would still apply the 50/50 rule to all income (on paper, I don't even have the first '10%', but it is apparently applied, but is an 'unwritten rule').

Sounds like yet another area where it is pot-luck on how your IP interprets things.

Personally, I like everything clear as day on paper - it saves problems down the line.

milliemonster

I had a large car repair bill just before Xmas and my ip let me keep their portion of my overtime as well as my own to pay it, and I don't have to pay it back, I guess it really depends on who you're with.

I don't understand when you say there is no incentive to better yourselves as the iva take 50% of your extra earnings, well it used to be 100% but IP's fought to have the rules changed so that it is now split 50/50, to give you incentive to earn more and keep 50% of that, glass half full and all that

FiatFan_2

It's definitely worth trying to better yourself, as ami66 says with a permanent wage increase then a new I/E should be done on the increased wage, then when your out of the iva it's all yours. Just have to try wangle some more allowances from the guidance book.

We're viewing our iva period as a learning curve and getting better qualified so when we're out of the iva we'll hopefully be in a great position.

ami66

I would love to have a wage increase but my IVA want to do the whole review just because our nett wage has increased due to the new tax codes! :eek:


Like you FiatFan we're using this process as a learning experience or rather a re-learning as I used to budget really well years ago. Things just got slightly out of hand more recently. Still onwards and upwards there is an debt free date to work towards with an IVA.