www.iva.co.uk

The spectre of redundancy looms large at my company and there is a 50%-75% chance I will be made redundant by February 09 if not before. As I type I am just over halfway through my IVA having paid off £37.5K and in February will be three years in (£41.2K).

If I am made redundant, I will be in a position to made a full and final offer, but what typically is acceptable (in % terms of the balance outstanding). Bearing i mind the current economic climate and ever increasing unemployment stats, it might be a good idea to retain some capital. I was thinking about a third of the balance outstanding - any views on this? Is this reasonable.

My IVA is with Grant Thornton, I was previously a DebtMatters client.

You redundancy payment is first and foremost paid to you as compensation of loss of office, and unless you have a new job available to walk straight into you will need to use that money to fund your living costs and IVA payments until new work is found.

Any surplus money you are then holding will be deemed to be a windfall, and will need to be paid into the IVA in any case on top of future contributions - so in reality it is not your money to negtiate with it belongs to the creditors, who will allow you to retain sufficient for your outgoings until new work is found.

It may be possible to take a gamble on the fact that you may not find a new job easily, and offer a full and final settlement using some of the money. I have done this on a number of occasions over the years, and largely met with success, but you will need to ensure that you do not leave yourself short of funds.

I would chat this through with your IP, if and when the unfortunate event occurs.

MelanieGiles wrote:

Any surplus money you are then holding will be deemed to be a windfall, and will need to be paid into the IVA in any case on top of future contributions - so in reality it is not your money to negotiate with it belongs to the creditors, who will allow you to retain sufficient for your outgoings until new work is found.

Thanks Mel.

Can you clarify the "on top of future contributions" comment for me. This sounds like I need to surrender the £ even if it means paying more than 100% dividend - or have I misread it?

You will not need to pay more than 100p in the £ to creditors plus the costs of the voluntary arrangement, unless your IVA provides for statutory interest to be paid on top.

MelanieGiles wrote:

You will not need to pay more than 100p in the £ to creditors plus the costs of the voluntary arrangement, unless your IVA provides for statutory interest to be paid on top.

Sorry Mel, I hadn't explained myself properly. The agreed dividend on my IVA equates to 89p/£, would I end up paying more than this?

Potentially yes - with an upper limit as explained in my earlier post.

Hi, sorry to hear you may be made redundant. I am also in the same boat as you!

Fingers crossed you keep you job x

i am as well my company is making 1000 redudant world wide and i wont know for another 2 weeks if i am one of them

That's terrible James. I hope you are one of the lucky ones.

What a stress.