www.iva.co.uk

Redundancy in 6th year because I cannot get equity release.

Hi, I'm close to entering into a 6th year of my IVA because I cannot release any equity because my mortgage is with Northern Rock, now known as NRAM.

Unfortunately where I work, it looks like I might be made redundant in the next 3 months or so.

My question is: Because I'm going into a 6th year because of equity in my property, would I have to give 50% of my redundancy money over to my IVA? or could I use the money to make a full and final settlement?

Redundancy money is payable in full into your IVA.... you are generally allowed to retain the equivalent of 6 months salary, from which you make your normal payments.

sorry, that's thrown me a little.

Do you mean I have to pay ALL of my redundancy money into the IVA?

That is the general position, yes, unless your IVA operates differently. As I said, you generally get to keep 6 months salary.

If paying this in brings your total payments up to 100% of the original debt plus fees ( and possibly statutory interest )then your IVA will cease.

Hi

Foggy is correct, however do chat with your IP who may agree to put an offer to your creditors equal to your remaining payments

Fingers crossed for you

Regards

If you are being offered voluntary redundancy you could make an offer now before the funds are available. Creditors then may accept a percentage.

Personally, I would view it as very unfair for an IP to take any redundancy money, when an IVA is in its sixth year and only extended due to equity payments. IPs have discretion with regard to windfalls, if the IVA is in accordance with the IVA Protocol, and I would not take this money unless you found a job very quickly after being made redundant.