about to get a sizeable redundancy payment

[jaykay]

I'm about to get a sizeable redundancy payment, but of course will have no other income until I get another job. I've had an IVA for nearly 2 yrs now; will I be expected to pay it all off at once, and if so, how will my final settlement be calculated?

The original debt was for about £31K, and I will have paid off around £9K by the time I get my redundancy payment.

[MelanieGiles]

Your redundancy money is paid to you as compensation for loss of office and as such is there to replace that lost income. So it primarily needs to be used as income replacement and this should mean that you can continue to make your IVA payments in the meantime.

In the event that you get another job before the money has been absorbed, then any balance will be treated as a windfall assuming that your new job pays you at least the same amount as you were previously earning.

[jayk]

HI Melanie thanks for that and sorry to have taken so long to come back. The most likely outcome is that I will eventually get another job, but less highly paid. If any surplus I have by the time I get employment is to be treated as a windfall, would it be better to offer full and final settlement at that point? Is the amount I'm considered to owe on the IVA recalculated if I have surplus money in the bank?

[MelanieGiles]

Possibly - but don't forget when it is gone it is gone and you still have to live afterwards. I did one very similar for a client recently based upon the dividend he originally offered and it was accepted by creditors. This left him with some of the redundancy money into the future to cover his living costs until he finds a job.