IVA and redundancy

Dullville

Hi, my pal is 6 months into his IVA and has just had confirmation he is getting made redundant is 2 weeks time, he knew the writing was on the wall as he has been stood at home for the last 4 weeks and has only worked for approx 3 weeks since Xmas( construction industry).
He is being evicted from his flat on Monday as well so things aren’t great at moment for him.
He will be moving back in with parents
He will receive approx 13k for his redundancy package.
I have told him to bite the bullet and go for bankruptcy now as he will have no income and as of yet hasn’t found a new job.
Ref his IVA can he just default on it and tell them he’s not in a position to pay anything and he’s going to go bankrupt and can the IVA company insist on him handing over his redundancy money, ie is there a grace period for redundancy payments?
Do the experts on here think it’s a good idea for him to go the bankrupt route?
His debts in the IVA are approx 30k.

Mermaid89

Most Arrangements will state can keep up to the equivalent of 6 months worth of redundancy or until he finds work, whichever comes first. So for example, if hes out of work for one month, he keeps 1 months equivalent of his salary then the rest is to be paid in full until he pays his creditors and fees associated with the IVA. What makes you think that if he goes bankrupt he will be allowed to keep the redundancy?

Dullville

Mermaid89 wrote: »

Most Arrangements will state can keep up to the equivalent of 6 months worth of redundancy or until he finds work, whichever comes first. So for example, if hes out of work for one month, he keeps 1 months equivalent of his salary then the rest is to be paid in full until he pays his creditors and fees associated with the IVA. What makes you think that if he goes bankrupt he will be allowed to keep the redundancy?

He’s got a 2.5 k vet bill to pay that wasn’t covered by his insurance, he hasn’t got a car as job provided a van and he owes his parents 6k so he’s not going to have a lot left of it anyway.

Mermaid89

If he goes bankrupt he can forget giving his parents £6k. Why should creditors lose out whilst he pays family back? The IVA would take a similar approach, sorry if that sounds harsh

Dullville

Mermaid89 wrote: »

If he goes bankrupt he can forget giving his parents £6k. Why should creditors lose out whilst he pays family back? The IVA would take a similar approach, sorry if that sounds harsh

Really? Fine if sounds harsh, however what’s to stop him paying his parents, vet bill and buying a vehicle and then going bankrupt? Might be a bit unethical but I doubt its illegal and they can’t come out him for anything as he hasn’t got nothing.

Mermaid89

Yes really. Not illegal no, but those finds are bound by the terms of the IVA and creditors would expect it to be paid. If its spent creditors would ask he pay in lieu of those funds. If he doesn't and the IVA terminates he will have to explain why he didn't make those funds available to creditors if he were to go bankrupt. Family members can wait, especially if there's a debt level which warrants becoming insolvent.

Mermaid89

As an aside, in terms of a vehicle if the value is deemed excessive it would.also be classed an as asset and creditors would expect all assets to be liquidised to help pay them back

Dullville

Mermaid89 wrote: »

Yes really. Not illegal no, but those finds are bound by the terms of the IVA and creditors would expect it to be paid. If its spent creditors would ask he pay in lieu of those funds. If he doesn't and the IVA terminates he will have to explain why he didn't make those funds available to creditors if he were to go bankrupt. Family members can wait, especially if there's a debt level which warrants becoming insolvent.

What planet are you on? He has an appointment with a specialist debt advisor from the RBL tomorrow and believe you me if there’s a way to get round this they will know, maybe they will tell him to not bother getting a job for 6 months and live off his redundancy money.

Dullville

Mermaid89 wrote: »

As an aside, in terms of a vehicle if the value is deemed excessive it would.also be classed an as asset and creditors would expect all assets to be liquidised to help pay them back

As an aside he won’t be getting a top of the range motor either!

Mermaid89

Once again a fine illustration of someone who doesn't like the answer so will just be rude to someone trying to answer their questions. Tell your "friend" good luck

PrettyKittyKat

Mermaid89 was giving accurate advice, no need to be rude in response!