Pay off part debt with redundancy 16 August 2021 at 11:12AM in Redundancy & redundancy planning 4 replies 234 views

jonny363

Hi all . 
Possibly up for redundancy in next couple off weeks. 😢. Will get a fair amount with 20 plus years service.
Ashamed to admit we have around 29k credit card debt .I would like pay lump off whilst looking for new employment.  But i have read this could still be classed as deprivation of capital. Surely getting debt down but not leaving us without money to pay essential bills etc c tax gas elec.
Thoughts of Being out of work and still having all the debt is making me feel ill. Thanks 

MattMattMattUK

jonny363 said:

Hi all . 
Possibly up for redundancy in next couple off weeks. 😢. Will get a fair amount with 20 plus years service.
Ashamed to admit we have around 29k credit card debt .I would like pay lump off whilst looking for new employment.  But i have read this could still be classed as deprivation of capital. Surely getting debt down but not leaving us without money to pay essential bills etc c tax gas elec.
Thoughts of Being out of work and still having all the debt is making me feel ill. Thanks 

Do you have any other savings and how long can you live off them for?

What would make most sense is to find a new job, then use any redundancy pay left over to clear the debts when you are in new employment. 

jonny363

Hi thanks . Good idea not really looked at it that way .not had a interview for 30 YEARS 🤮🤮if I paid lets say 12k off debt could probably manage 6 months just paying bills .

MattMattMattUK

jonny363 said:

Hi thanks . Good idea not really looked at it that way .not had a interview for 30 YEARS 🤮🤮if I paid lets say 12k off debt could probably manage 6 months just paying bills .

Double check a few things, but if you have a partner working and with your pay-out, regardless of what you do with it, it is unlikely that you will be entitled to benefits. 

My personal opinion would be to keep the whole lot for the moment. Obviously start job hunting straight away, but do not jump at the first thing you see, if you have 6-12 months reserves you have the time to find a good job, rather than just any job. Then once you are in employment put everything you can towards debt repayment (other than a rainy day fund). It might also be time to head over to the Debt Free Wannabee board on here and have a good look at your finances to plan for long term debt clearance. 

I would not worry about interviews, people know that not everyone interviews easily, but if you are good at what you do then that will show through. The jobs market is pretty buoyant at the moment for people with either specific or transferable skills, or even for those with industry specific skills in many sectors. A few of my friends have lost jobs over the last eighteen months, all have found new jobs at a similar or sometimes even better pay than before, though most of them are in different sectors. 

getmore4less

When income is compromised cash is king.

Start raining in the spending now, you want as little as possible going out until income is restored.

BUT if you have high interest rate debts they should be considered.
Any on Zero/low rates then think carefully about paying them off  because if you end up borrowing again you might not get the rates. . 

You can claim 6 months contributions JSA(or equivalent)

As said after that the deprivation only comes into it if you try to claim means tested benefits so check the eligibility of that anyway..


Don't forget there is a shortage in some sectors so there should be some options to generate income while looking in your preferred sector.