Hi all – I joined here a couple of years ago and found all the advice invaluable when I was starting my IVA. I’ve now been in the IVA almost 2 years, paying approx. £230 per month and although it has been tough, I was getting there.
I’ve now been made redundant and will leave my current job at the end of March. I immediately went into panic mode and was lucky enough to secure enough job to start early April, although this is a 12 month contract and on lower salary (by £2k per year). With hindsight I should have taken my time and looked wider but the thought of being out of job for a single day panicked the life out of me.
My understanding is that as I’ve now got another job I’ll be paying all of my redundancy into my IVA and continue payments as usual. This I don’t have a problem with as it’s what I signed up to.
My questions are:
1) The pay-out I’ll be receiving when I leave is made up of different elements – redundancy pay, 2 months tax free notice pay, employer pension contribution for the 2 month notice period and any accrued holiday pay. Do I have a case for keeping any of these elements – especially some of the notice pay as there is a gap of around 10 days before I start my new job so will have no income for this period.
2) When I start my new job I understand my income/expenditure will be reviewed . As I’m taking a salary drop I’m concerned that my surplus will be so low that it will be below the minimum monthly payment required – what would happen them, would my IVA be failed or would the lump sum I will have paid in be looked at favourably.
I will of course be liaising with my IP but just wanted to get things clear in my head first. I’ll be grateful for any advice you can give, thank you.
If the new salary is too low why not see if they accept the redundancy as a full and final.
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
The justification being that your reduced salary of £2k per annum (£167 a month) will reduce your I&E spare that you currently pay from £230 spare a month to £67 spare.
As in telling your supervisor spare cash is now reduced to e.g £67 a month over 3 remaining years = £2,412 (or whatever numbers you calculate). So redundancy payment to make an offer of remaining term x remaining payments on new reduced spare cash, for me big thing to highlight would be the risk after the next 12 months also. Also your travelling expenses may also have increased in commuting to your new job etc etc.
Last edited by longslog101 on Wed Mar 18, 2015 8:33 am, edited 1 time in total.
My Blog details, the route I took before IVA, how I choose my firm, equity release advice (year 4-5), challenging the CRA's keeping IVA on credit file once gone from insolvency register
IVA ended August 2015. Would recommend McCambridge Duffy
They are unlikely to accept the redundancy monies as full and final as they will be getting that money anyway under the terms of the arrangement.
Normally, you are allowed to keep up to 6 months salary equivalent whilst looking for a new job, so the IP should agree to a sum to tide you over between jobs.
If the new I&E shows that the IVA is no longer viable the creditors might accept payments made to date to close the IVA, rather than fail it. Yes, the redundancy monies paid in will help this cause as it will bring you nearer the expected dividend.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
