Bankruptcy and redundancy

fozz_y

Hi,


Me and my wife were declared bankrupt on the 6th jan 2014, and we have held a conversation with the OR soon after, but have heard nothing since.


My situation is, last may I had an accident at work which has kept me off work since, and now I have been made redundant as its now clear I will not be able to return to work because of the injuries. Ive recently had another operation to try mend me, And now I have applications going through to housing benefit to help pay the bills, but this is drastically lower than my wage that was still coming in. (which was a insurance claim from my employer).


My redundancy is going to be £2025


.. And because of my low earnings, we have been told that once my P60 hits the system come April showing no earnings, we will be entitled to a pay out from the child tax credits, thought to be around the £3000 mark. My question is, am I going to be able to keep some of this? As im not to be earning, and WILL need it to live on as im not going to be returning to work anytime soon...


Thanks for reading and appreciate any advice...

debt_doctor

Hi,


A redundancy payment will be seized in full as an asset as 'after acquired property' - a payment for compensation for injury is treat differently, but you stated this is a redundancy pay out.


The tax credits issue will depend upon whether at the time of receipt you have other earned or pension income. - if you have the tax credits pay out would be divided by 12 to give a monthly figure to see if an IPA could claim some of the EARNED or Pension Income.
If all of your income at the time was benefits, then you can keep the money.


DD

fozz_y

Hi thanks for the reply, so just to clarify, I will loose the redundancy which is fine. So the tax credits.. at the moment as per the letter received today we are owed, £3400, and they are going to pay us £200 this month, then £200 in march, then if we prove there figures in April, which we can, they will release the remaining £3000, which was payments we never received last year, and once that's paid out, we will continue to receive a payment from them from end of April, of around £200.. Can we keep the £3000? I will be still on benefits then, with my wife working 20 hours a week, which has not changed. Thanks.

debt_doctor

Yes you can (in that situation you have described)


Benefits do not vest in the trustee, they cant be seized as an asset.
benefits can be ADDED to INCOME, and if a surplus above your reasonable domestic needs is found an IPA can be sought up to the value of the INCOME.
If no earned INCOME then no IPA.
However, from what you just said it gets a little more complicated....


You are both BR.
Your wife works 20 hours per week.
Your tax credits is a joint claim.


I would expect the OR to apportion 50% of the tax credits to you - no IPA for you, as yours is 100% benefit.


Your wife, could, POTENTIALLY have an IPA for UP TO her earned income, if she met the standard conditions for having an IPA.


DD