Redundancy

[misc]

On the 18th of December (after a 90 day consultation period), I'm going to be made redundant. My IVA is scheduled to terminate in April 2009. Before tax I will receive 40k and expect to get around 34-35K net as some 27K is pure redundancy which is not taxed, the rest being notice - 3 months, bonus, holidays which are taxed.

I am 47 years old and I know there isn't supposed to be Age ism, just like there isn't supposed to be sexism !!! so I'm worried that I may never be able to work again. There is a possibility of a transfer with the same company to Australia/NZ . . . in which case I wouldn't get the redundancy, which is obviously appealing. Alternatively I could try to build my bookkeeping business with my redundancy payment.
There is a freelancing opportunity which could dramatically improve my income, but costs £ 14K + VAT and represents a risk . . . would I be allowed to buy the franchise? I'm currently paying £ 550 a month, so over the remaining 16 months (from December) to the end of the IVA I would expect to pay about 9K.
Could I make an offer around this figure ? (I have been advised that I might be able to offer 75% of the outstanding amount - is that true ?)

As I try to finance the business I'm thinking of doing bar work. I am seriously worried that any attempts I might make to pay my way in society might be hampered by my attempts to market my business which requires funds.

So what are my options realistically ?

[Adam Davies]

Hi Misc
It would be prudent to pay off the IVA with part of the redundancy,not sure of the 25% discount though.Once you do this then you would be free to purchase the freelance opportunity.Have you had a look at your IVA terms and conditions to see what they say about redundancy ?Also have a chat with your IP now so that you are clear about the options.
Good luck

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[misc]

The 25% discount was mentioned by a different debt counsellor to my IVA supervisor, and I think it was suggested on the basis that I could offer that, but my creditors may accept or reject the offer. I'd be happy to make 100 % of the outstanding contributions, if it meant getting the IVA off my back. I was previously advised on here, that I would need to continue paying the monthly sums until I got a job, at which point I would need to pay the remainder of the redundancy into the IVA . . . but if the IVA company was to accept the £ 9,000 as final settlement my creditors would get their dividend NOW, and I could start to get my life back together again. The alternative would be to stretch the redundancy as far as I could and that would probably take me past the 60 month termination date. That being the case then my creditors would have nothing to benefit from rejecting my offer.
I don't recall there being any mention of redundancy (at all) in my IVA proposal. I suppose the best thing to do would be to contact the company directly.

[Adam Davies]

Hi
Yes,I agree.Contact your IP and ask him to be ready to have a variation meeting set for early December and offer the remaining contributions as a F+F.State that you are not confident of finding new employment.
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[misc]

I've been in touch with Debt Free Direct, and first they told me I had to have the redundancy money in my account, before I could give an F + F settlement. At which time the redundancy payment could be seen as a windfall and potentially 100 % would have to be paid into the IVA. This would leave me destitute, can they take this money from me when I'm unemployed ?

When I said that an alternative would be to re-deployed in Australia, and with the lower salaries, it would probably take longer to pay off the outstanding amount - they seemed to relent. They asked me to provided a letter from employer to indicate what the anticipated redundancy would be.

Where do I stand ? They have told me that in order to meet the 38% tariff I would need to pay £ 11,150 . . . with the payments for November and December this would become £ 10,050. If I became redundant I would be more than happy to pay this figure and be released from this milestone. The actual payoff will be £ 34,000 approx which after paying 10k would give me some breathing space as I look for other work.

There is nothing in my proposal that covers redundancy, but there is about windfalls. I am worried sick over this particularly as I have a stutter which only shows when I am nervous such as an interview situation. I could be offered a transfer at anytime in which case I wouldn't get the redundancy pay but I would have a wage.

I feel that effectively DFD are pushing me into the transfer, rather than what I would rather do and that is effectively settle the IVA, with enough left over to keep a roof over my head.

I'm just trying to do the right thing.

[Adam Davies]

Hi
You must press DFD to put a variation forward.Redundancy can't be a windfall if you have no job,it is for you to live on.
Put your offer of a full and final in writing to your IP and advise them that you will require them to arrange a creditors meeting once you have conformation of your redundancy.They are reluctant to propose an offer via a credtors meeting until they are sure that you will have the funds because of the costs involved,and this is understandable.
Let us know how you get on
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[MelanieGiles]

Redundancy money is not a windfall, so don't be pushed into believing it is. It is compensation for loss of office, and is to be firstly used to replace your loss of earnings. The only time that redundancy money would be viewed as a windfall is if you found alternative employment at a similar or higher level than you had been earning, and were left with surplus monies.

I have very successfully proposed and had accepted the sort of proposal you are offering, based upon achieving the original dividend.

Do the best thing for you and your future, without the unecessary pressure you are currently appearing to be subjected to.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[misc]

Thank you - that helps a lot. When I first got onto them, I was speaking to some sort of customer rep, who said that the redundancy pay would be seen as a windfall. She also said that I might be able to keep some of the money and gave me the impression that most of the redundancy money "might" have to go into the IVA, at which point I panicked and obviously was very upset. I was then put onto a "Insolvency Practitioner" - I use the term very loosely !! I expressed the concern that I could end up homeless (I used those very terms), and at no point did she re-assure me that that wouldn't happen.

She will ring me tomorrow, and hopefully we will have a more fruitful discussion. Melanie and Andy I can't thank you enough for the weight that you've taken off my shoulders. Thank you so much.

[Adam Davies]

Hi
Be confident and quote this forum if you need to [they will be aware of it]
The problem with large companies is that you often have to deal with staff that are not fully upto speed with the ins and outs of an IVA.Insist on speaking with your actual IP.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[misc]

Didn't go well ! They are insisting that the redundancy payment IS a windfall. I could apply to retain some of the redundancy pay - but not all of it. What are my options ? Is there any legal statutes that I can quote ?

[misc]

They also said that if I send a letter from my employers indicating what the redundancy payment would be then if my creditors accepted my offer, it could be settled within 6-8 weeks. Still very worried about their statement that the redundancy payment is a windfall.