Redundancy

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allan.f

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Post by allan.f » Wed Apr 11, 2007 3:08 pm
I am to be made redundant (company closure) the deal is that I leave in June with pay until January.The total package inc.redundancy will be about £37k.I am 4 months into my IVA do I just continue making the monthy payments as technically my circumstances do not change incomewise until January 2008? I am paying £490/month into my iva and in June I will have 54 months left (54 x 490 = £26460) so I will have enough to cover the rest of the payments if I don't get a job.
If I do what will happen to my redundancy money?
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Adam Davies

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Post by Adam Davies » Wed Apr 11, 2007 5:24 pm
Allan
You will need to speak with your IP as soon as possible.
You may well be able to offer a full and final settlement from your redundancy money.
regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp
Andam Davies
 
 

MelanieGiles

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Post by MelanieGiles » Wed Apr 11, 2007 5:46 pm
This is very topical for me to answer today, as I have been writing a variation proposal for a client which covers exactly the same circumstances as yours.

My initial advice to my client was to put the money in a high interest deposit account, releasing the equivalent of his salary each month whilst he looked for work. If an alternative position could be found in the meantime, then we would take a view as to the treatment of the remaining monies - which would then undoubtedly be deemed to be a windfall. Redundancy monies are not classed as windfalls unless alternative employment is found to mitigate any loss.

My client considered this for a couple of months, and has recently asked me to propose a full and final settlement to his creditors, on the basis of his remaining redundancy money. He has been unable to find work, but the worry of having an IVA hanging over him was too much to bear whilst he was seeking work. We will have to see what the creditors say.

The important thing to remember is that you have to live whilst you are looking for employment. I would not rush into a decision, and this will be tempered by how quickly you feel you could return to work. As you rightly say you are not affected until January 2008, at which time I assume you receive your lump sum. In the meantime you may find a job, in which case the redundancy pay will be caught by the IVA as a windfall, unless the new job pays a lower salary which I would set off against the lump sum.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk
Regards, Melanie Giles, Insolvency Practitioner
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