Redundancy question

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kate753

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Post by kate753 » Fri Jul 31, 2020 3:34 pm
Good afternoon. We have been told today that we are being made redundant. I have been there for 13 years. I currently have 18 months left of my iva. I pay monthly payments of 115 pounds a month. My company are asking us to take voluntary redundancy. I would get ten thousand pounds. Can you give me advice on a, if I am even allowed to take voluntary redundancy on an iva. (Business is closing down till March due to COVID) so will be made redundant regardless and b, what will happen with my redundancy. Is there an option to finish it off earlier?

Thank you for your time

Foggy

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Post by Foggy » Fri Jul 31, 2020 4:26 pm
When you are made redundant the usual clauses state that you are allowed to retain 6 months net salary, from which to live and make IVA payments as usual. The rest of the redundancy compensation is payable into the IVA and the IVA will continue as usual, unless the payments you have made reach the sum of the remaining original debt balance, fees and possible statutory interest, in which case it will end.

You could have made a lump sum offer, based on remaining payments, before redundancy was confirmed. The fact that the redundancy will be voluntary might work in your favour, in that you could make a lump sum Full and Final offer based on the premise that you will accept VR, but only if the offer is accepted by creditors. As far as they are concerned, it they reject the offer, you do not take redundancy.

All that said, have a read here: https://www.gov.uk/government/publicati ... a-protocol Particularly Section 3 para 1.13:

1.13 The supervisor has discretion, in relation to whether any redundancy payments in excess of six months net take home pay are required to be brought into the arrangement as set out in clause 10.6 during the duration of the pandemic.

This, to my mind would give the IP the discretion to allow you to retain the compensation, and the arrangement will continue to its natural conclusion, or to accept some of it in full and final payment, therefore ending early .

Much will depend on who you are with and how sympathetic your IP is.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk
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