Redundency & IVA Question

sillysausage1977

Hi, my husband's IVA is due to finish in December this year (5 more payments to go). He got made redundent 3 weeks ago and will be due some redundency.

I know the IVA will want most of it 😢. My question is the redundancy is made up of different elements, there will be back pay which he didn't receive, the notice period which he didn't get and the actual redundency itself. Will they put all these elements together and class them as one 'windfall' or not?

What happens with IVA'S at this late stage, they wont fail him because he cannot pay his monthly payment? He is the to ring them in the morning.

Thanks

DorisTrousers

Most IVA companies take a pragmatic view on this. The benchmark seems to be that you can set aside the equivalent of up to 6 months take home whilst you look for work, and then whatever is left gets paid over. Of course, if you find work in the meantime then that is a little different.

Best speak to your IP.

sillysausage1977

Thanks for your reply. My husband spoke to them today and we need to cancel the Direct Debt and go into arrears, we also need to get another house valuation and mortgage redemption certificate (what is that about?) They are going to have a creditors meeting once they have this information.

What if my husband dosnt find a job straight away and we end up having to use the redundancy to live off (it will only be a couple of grand anyway) they may end up getting no redundency. We will be in arrears, can they fail him and take our house, really worried we have 2 small children to think about

DorisTrousers

Are you in the last of your 5 years and a homeowner? Or are you in the last of 6 years because you could not release equity?

It is technically possible that creditors may vote against any variation, however, given the circumstances, that would probably be a little harsh in my own opinion.

sillysausage1977

We are in the 6th year a homeowner and have already gone through the valuation, trying to obtain a remortgage thing so can't understand why they want this again?

DorisTrousers

Second guessing somewhat, but looks like just a formality to give creditors up to date info.

As I said, technically they could reject but I feel it is unlikely.

sourcrates

I don't know what you sorted out, if anything, but one option would be to offer the majority of the redundancy in full and final settlement of the IVA.

At least that way it would be over with, he would be debt free, and not have to worry about it failing at such a late stage.

sillysausage1977

It looks like that is what I going to happen, hope he manages to find a job soon 😕

RickLewis

The big thing here is communication. Talk to the company handling your IVA. They will recommend the best course of action. Creditors aren't completely without a heart. If you have made your payments on time for 4 1/2 years they will look very favourably if you request an early release/payoff from your IVA due to this blow to your income. We went through a similar situation ourselves and the creditors 100% voted in our favour.