Iva and Redundancy

[David Mond]

It is not for an IP to try and re-invent what is and is not a windfall. Under the new Standard Terms it is defined.

I will go for up to 6 months as suggested by you and I believe that is what was tacidly agreed under the Protocol - I will check my notes when I get home.

[go_4_broke]

I think I prefer Melanies view - it seems a lot more humane.

No offence but I think it is just this sort of draconian/standardised approach (enforced largely by creditors) that is slowly killing IVA's.

More people are going to end up in OR's office or worse, my dodgy trust scheme !

Don't forget the I in IVA is supposed to stand for 'Individual'

[Skippy]

Yes Go For Broke, an IVA is individual but that doesn't mean that people should be encouraged to look for loopholes to avoid paying money into their IVA. An IVA is a means of paying as much back to your creditors as you can, not a way of avoiding paying money back.

[kallis3]

Hear, hear Skippy! Couldn't have put it better myself.

[FreshStart2008]

As far as I was aware you can't setup a trust for your own personal benefit.

[kallis3]

Whether you can or not, it is not something that someone in an IVA should be even thinking about. It would be debt avoidance.

[David Mond]

Vicky W - Redundancy monies are a windfall - as previously stated and your right that most practitioners would accept that if a person was made redundant he/she should use those monies to live on, pay his/her IVA contribution - look for work (and demonstrate that fact to his/her Supervisor (IP)) then pay the balance into the pot. This is the practical way that Melanie (and others) adopt - the simple fact is though that Redundancy monies are caught by the "windfall clauses"

[MelanieGiles]

And another simple fact is that this is exactly the same way that these monies are dealt with by the Insolvency Service themselves under the After Aquired Assets provisions.

[David Mond]

You mean received after bankruptcy and before discharge?

[MelanieGiles]

Yes - I mean under the After Acquired Asset provisions - S307 if I remember rightly?

[David Mond]

Bang on Melanie - even at past the bewitching hour your still awake?

[go_4_broke]

Hi Skippy and Kallis

Yes, some people might enter into an IVA with the intention of paying their creditors as much as possible.

However for may it is simply the 'least worst option' and carries no special significance.

I believe the treatment of redunancy monies under the circumstances described is fundamentally unfair.

This is not a 'windfall' in the sense of a lottery win or an unexpected legacy. As Melanie states it is 'compensation for loss of office'. David says it should be allowed to be used as earnings replacement for a maximum of 6 months. The least that should be done is that should be extended to 'indefinitely'.

If the treatment was more reasonable in the first place there would be no need to consider such schemes.

[Skippy]

I agree that the redundancy money should be treated as compensation for loss of office. However if someone gets a job before the redundancy money is used up then surely there can be no argument about paying it into the IVA.

What I don't agree with is dishonesty, and hiding (or trying to hide) money from your IP is dishonest.

[go_4_broke]

I think someone who is made redundant after a 30 or 40 year career might not take that view.

And as the the IP is simply operating under the IVA rules and will (largely) take the money off them, they then have a right to consider alternatives outside of the scheme.

Whether or not it is honest or not is subjective and a matter of individaul opinion. A better test would be whether or not it is actually legal.

Best Regards

[Skippy]

I think we're going to have to agree to disagree on this one.