IVA and Redunancy

wadalabbassiya

Hi,
My company has  advised me that my job is at risk and I will be made redundant within 2 months.
I'm expecting to be paid  around £30.000 .I'm on a 5-years IVA agreement .I have 2 years left.My  original debt was £37.000 and I pay monthly £410 that's £ 4920 annually.Can I offer  £10.000 to the IP as a final pavement and keep the rest of the money? or the creditors ask for the all redundancy money ? I know I can keep six months money and pay what's left towards the IVA ,if I don't find a job straight away .

Exodi

Firstly, Is this sum £30k calculated yourself or have you been provided a breakdown by the employer.

The reason I ask is because we've unfortunately had to make a few people redundant, and all seemed to believe they would receive more than they did (it may be something to do with online calculators). To be clear: you'll be paid your notice period (PILON), any accrued holiday, any outstanding pay and a statutory redundancy payment, however, while the redundancy payment is tax-free (under £30k), PILON, holiday and outstanding pay remains taxable as usual.

Secondly, I'm a bit confused on this bit:

wadalabbassiya said:

Can I offer  £10.000 to the IP as a final pavement and keep the rest of the money?

With respect, you don't get to decide what you want to pay. You should tell the IP how much you will receive (when confirmed by the employer or paid) and they will tell you how much you need to pay.

https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/individual-voluntary-arrangements-ivas/while-youre-on-an-iva/if-your-circumstances-change-during-your-iva/#:~:text=If you're made redundant during your IVA&text=You'll get to keep,be breaking your IVA arrangement.

"You'll get to keep 6 months’ worth of your take-home pay from your redundancy money. If you have any money left over, you’ll have to put that towards your IVA.

If you don't tell your insolvency practitioner you’ve been made redundant, you could be breaking your IVA arrangement."

Grumpelstiltskin

Remember as well as your total debt there will be all the IVA companies fees to add on, so they will want much more than you think.

fatbelly

I was going to comment but they've mentioned the important point s:

Your agreement will state how redundancy payments are to be treated and likely to be as quoted. They are not treated like other windfalls where the IP can take the lot.

There will be fees to pay in addition to paying the creditors in full. You may have to pay interest too.

If the result is that everyone is paid in full then the IVA completes. 

wadalabbassiya

Thank you all for your useful replies.

sourcrates

Or on the flip side, keep the redundancy money and don`t tell the IP, let your arrangement fail, and deal with the individual creditors as and when they get wind of what's happened, likely in a year or so.

By then that emergency pot will be brimming, settle your "pavements" how you like then can`t you lol.

Down side, can be a risky strategy, especially if your a homeowner, and I`m not advising you should do this, but I thought I would mention it, as its important you know all your options.

wadalabbassiya

sourcrates said:

Or on the flip side, keep the redundancy money and don`t tell the IP, let your arrangement fail, and deal with the individual creditors as and when they get wind of what's happened, likely in a year or so.

By then that emergency pot will be brimming, settle your "pavements" how you like then can`t you lol.

Down side, can be a risky strategy, especially if your a homeowner, and I`m not advising you should do this, but I thought I would mention it, as its important you know all your options.

In Fact ,I'm not home owner and don't have any assets, What  thought about what you said ,to deal deal with the creditors directly and pay them ,but I'm worried about taking to the court and bankruptcy. 

Grumpelstiltskin

Forget being taken to court and bankruptcy, if and it is a big if anyone decided to go for a CCJ you have plenty of time in advance to make a payment before it happens.

Can I ask you why if you are not a home owner did you go for an IVA? Not taken in by adverts on social media?

wadalabbassiya

Grumpelstiltskin said:

Forget being taken to court and bankruptcy, if and it is a big if anyone decided to go for a CCJ you have plenty of time in advance to make a payment before it happens.

Can I ask you why if you are not a home owner did you go for an IVA? Not taken in by adverts on social media?

In fact ,I was confused and I saw an advert ,attracted and went with it. I'm up to date with my payment that started in April 2021.in IVA agreement I'm obliged to tell the IP everything about my finance .I find paying all my redundancy  to the IP is a bit unfair.

Grumpelstiltskin

Honestly your biggest mistake was entering the IVA without fully researching what was available to you.

IVAs are normally only advised for home owners with very large debts when they can't go bankrupt.

Normally if you are renting a DMP is the answer, informal, no insolvency, but you are where you are.

wadalabbassiya

Grumpelstiltskin said:

Honestly your biggest mistake was entering the IVA without fully researching what was available to you.

IVAs are normally only advised for home owners with very large debts when they can't go bankrupt.

Normally if you are renting a DMP is the answer, informal, no insolvency, but you are where you are.

IF IVA fails will creditor backdate interests and charges since IVA was approved when I come deal with individually?