Our joint overall debt was approximately £50,000. Under the terms of our IVA, only 15% of this is repayable over 6 years, that is £7,500. We are 3 years into the agreement and we have paid a total of £3,750 so far, remaining a balance of £3,750 over the next 3 years. MY QUESTION:I am expecting a redundancy pay of £8,000. Will my IP request that i put the whole redundancy pay of £8000 into my IVA since the original debt before IVA was £50k or I will be required to pay only the £3,750 outstanding under the IVA?
During an IVA you always owe the full original debt, plus fees and possible statutory interest --- only at the end is anything unpaid written off. If you pay in extra money (overtime, compensation, PPI, or a lottery win) it increases the amount of debt you repyy, but does not shorten the IVA.
With regard to the redundancy compensation you are going to get, assuming you have the usual clauses, you are normally allowed to keep the equivalent of 6 months salary with which to live and pay the IVA while looking for a new job. The rest is payable into the IVA. If you find work in, say, three months, then the "unused" part of the 6 months money you were allowed to keep (3 months salary) has to be handed back to the IP to go into the IVA.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
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If your IP allows you to keep some of the redundancy money and you find new income, you might be able to use the balance to put forward a full and final offer to finish your IVA early.
