My wife and I have been paying £350 pounds a month into a joint IVA for 18 months, and have to raise another £12000 in equity at the end of the 5 years. I am about to be offered between 25- 30 thousand voluntary redundancy. I intend to start a business as alternative employment. I would need a large part of the redundancy money for stock. Would there be any way I can keep this money, as long as I can prove I am using it for my business, and continue to pay the £350 a month ? I really want to take the money but if I have to hand it all over I may as well stop in my job (which is very unstable at the moment- Royal mail).
Your redundancy money, whilst it is paid to you as compensation for loss of office, is actually a windfall under the voluntary arrangement and will need to be declared as such.
Having said that, if the new business is being set up to provide you with a replacement income, which can ensure the future of the IVA, then you may be able to justify the retention of a working capital sum to establish your business with.
Talk to your own IP about this to gauge their reaction.
This is a very difficult situation and different IP's would either be prepared to do a compromise with you whilst others would not.
Your IVA refers to windfalls which a redundancy payment is. All windfalls have to be paid into your IVA to the extent to pay off creditors - but no more than 100p in the pound.
You will need to discuss the pros and cons with your supervisor on your suggestion and see what he/she is prepared to do. In the end he/she might have to request permission of creditors as the final arbiter.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
You were telling me recently that the Standing Committee were going to provide some direction on redundancy payments. Was the issue of whether a lump sum could be offered in full and final settlement actually discussed? If not, it would be great to get some clarification on this point.
