I am in the process of going through a compromise agreement which may end up being a lot less than originally expected. I currently don't have a job to go into and I have a number of debts that obviously need to be paid. I am thinking of contacting an IVA company before I sign to get the ball rolling with a view to reducing the debt payments as quickly as possible. What are the implications of having the compromise redundancy payout before I do the IVA? It will effectively be "savings" to live on whilst not having any income.
Hi and welcome to the forum. I would advise you to take case specific professional advice. www.iva.com shows a list of companies if you haven't already chosen one. Do ring and take advice from 2 if not 3 companies to ensure impartial, case specific advice.
One of our experts may be able to give some general advice on your question so we'll keep this bumped up for you x
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
Are you suggesting that you might enter into an IVA using the money you receive from the compromise agreement in full and final settlement? Without a stable form of income, and needing to use the money you receive to live on until you find a job, may not be the best time to be thinking of entering into a formal debt solution.
Thanks for your comments. My aim would be to live off the money I receive from the compromise agreement until I got another job. The problem would be that a significant portion of the money would go towards the debts on a monthly basis. Ideally what I need is to have the compensation money "protected" so I can live off it, whist taking the IVA to manage the debt. I would prefer to then make token payments to my creditors. My income would essentially be £0.
I think a DMP is a better solution for you then Peter - it will give you breathing space whilst you look for that important new job, which is a higher priority at the end of the day. How long do you think you will be able to survive on the settlement monies?
At a push, the money would last probably 3-4 months. I'd need to significantly reduce the debt payments after which it would last 6-9 months, giving a fair degree of breathing space. My monthly debt outgoings are approx £1,000.
If you were only paying token payments to creditors - say £20 per creditor simply to maintain a pattern of payments - how long would the redundancy monies then last? And how much do you owe to creditors in total over how many different accounts?
In total, around £40k unsecured loans - the annoying thing is they are all due to end in about 3 years or so - paying £20 per creditor, of which there are 6, would allow the money to go a good 10 months.
I suggest you look at doing this as a temporary holding measure Peter - to give yourself sufficient time to get a job., If you do get one before the redundancy money runs out, then you can use the balance to pay off some more of the debts. Try and make the token payments proportionate to the debts - so higher payments to larger creditors.
The latest is I have gone back to my employer to ask they give me the money I originally agreed to. I'm going to have a chat with a debt management company next week to see what the options are. If I can get on a DMP for a while until a new job is sorted I can then review options. Hopefully that will be sooner rather than later!
Best of luck - and I really hope that you manage to find a new job soon. A stable income again may mean that an IVA is a sensible route for you to consider in the future.
