Hi. I've been in an IVA for just over two and a half years now and I found out in December that my company are cutting over 300 jobs and mine is one of them! They are offering voluntary redundancy at the moment and I have been quoted a total of £19,924.00 to leave now. Compulsory redundancies will begin in March and I understand the money for that will be far less than the voluntary packages being offered now. So naturally, I am keen to take the larger offer and go this month. However, can I be penalized by my IVA company if I take voluntary redundancy? Could they lay claim to some, or all of this money as some sort of windfall? Am I better off waiting for compulsory redundancy in March? I'd be really grateful for your advice on this matter.
Hi, sorry to hear your news of the redundancies.
You need to discuss this with your IP, as depending on the figures, you could look at offering a proportion as full and final settlement and complete your IVA early.
Obviously, you would need to look at the prospects of finding new employment, and whether you need to keep some of the funds to tide you over until a new job is found.
Redundancy money can be classed as a windfall, however most IP's will look at the best option available to you and whether you can complete early, which will you to start your life a fresh.
Good luck and please contact your IP to discuss the figures in more detail.
If you don't offer any of the money as a full and final, you are allowed to use the money in lieu of wages whilst you seek further employment. Once you get a job, any residue has to be handed over as a windfall as Kazz says.
I hope you manage to find further employment soon.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Redundancy money is a windfall, but it is generally accepted that it firstly ought to be used as compensation for loss of office - and I would suggest a six month period would be realistic. Once you find alternative work, the remainder of any redundancy money would have to be paid into the IVA.
So at the end of the day it is not really your money to negotiate with, however I have certainly used redundancy monies in the past to settle IVAs, where my client has been prepared to take the risk that they will find work quickly. In an uncertain job market at present, I would be concerned about doing that to be frank. You may need the money just to keep going.
Melanie is spot on and whilst your redundancy monies are classed as a "windfall" keeping sufficient for 6 months would be acceptable by most IP's. Discuss your situation with your Supervisor (IP) and see what he/she thinks. Good luck.
Last edited by David Mond on Tue Jan 06, 2009 10:21 pm, edited 1 time in total.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
If you speak to your IP a variation could be proposed whereby a percentage of your redundancy monies are offered as full and final. Creditors would likely accept this as there is the danger of compulsory redundancy later with little return. If the variation was prepared quickly you would not have to make any decision until after creditors had given their approval.
The advantage for you is that the IVA would cease and should you find another job no further payments would be required. The advantage for creditors is that they get guaranteed money now and no threat remains to the IVA of failure and bankruptcy.
Ok thanks guys. I hadn't thought about using the money to end the IVA early but as you say Melanie, the job market is dire at the moment. I'm not confident about getting another job anytime soon. I will speak to my IP today, thanks very much for all your replies.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Hi, new member here - drawn in from Google as my question is almost exactly the same as Retwiz: been offered voluntary redundancy with the likelihood of compulsory soon if I don't take it. I'm also 2 and a half years into my IVA - the original debt was 21,000 and the agreed final payments would be a little over 11,000 at the five years mark. I have written to them with the details of my redundancy offer and am waiting for a reply.
But I was wondering, to help me get a jump start on a decision, would any F&F settlement be based on the original debt or on the agreed final amount? ie: if I paid the balance of the £11,000 left on my IVA, would that be considered a full settlement, or would they try to claim the balance up to £21,000?
I do hope this isn't too silly a question, but I need to try and sort my options out quickly! Thanks in anticipation.
Terri.
Whilst you are in an IVA, you do not get the benefit of the balances being formally written off until the end of the IVA - so you do technically still owe the full £21,000, but this does not mean that creditors would not accept a full and final offer of settlement.
Do remember that redundancy payments fall under the windfall provisions of your proposal.
Hi, Melanie, and thank you very much for your swift reply! I suppose I'll just have to sit tight and hope it's still a worthwhile option when they've taken their due.
Thanks again!
Welcome from me as well - and good luck with your offer.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Your offer is more than enough to be accepted as your creditors will get now in advance what you promised them over 5 years - I am sure your IP will put the variation to creditors and support it. Let us know how you get on.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
