What will happen to IVA if I am made redundant

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den162
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by den162 » Wed May 09, 2018 12:58 pm
I am 6 months into my iva , I could be made redundant soon, I am 61 now and unlikely to find another job, what will happen to the iva ? What will happen to any payout I get? How does bankruptcy work from then on?
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kallis3
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by kallis3 » Wed May 09, 2018 1:19 pm
You are allowed to keep up to six months worth of redundancy while you try and get another job. As regards bankruptcy, is there anything stopping you doing that?
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Lisa Thomas
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by Lisa Thomas » Wed May 09, 2018 3:01 pm
You could offer the remaining balance of the redundancy money to offer an F&F to vary and finish the IVA early, on the basis there will be no dividend to creditors if Bankruptcy ensues but that will depend on your circumstances/assets etc.
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den162
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by den162 » Thu May 10, 2018 6:20 am
kallis3 wrote:
You are allowed to keep up to six months worth of redundancy while you try and get another job. As regards bankruptcy, is there anything stopping you doing that?

Thanks kallis3, when you say 6 months of redundancy, is that 6 months of my current salary? The only thing that stopped me going bankrupt was the stigma, now it could be my only option
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den162
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by den162 » Thu May 10, 2018 6:35 am
Lisa Thomas wrote:
You could offer the remaining balance of the redundancy money to offer an F&F to vary and finish the IVA early, on the basis there will be no dividend to creditors if Bankruptcy ensues but that will depend on your circumstances/assets etc.

Thanks Lisa, I did read somewhere about the 'offer' option and I would seriously consider that, although by my calculation the redundancy payout would be approximately 35% of the debt (15k of 40k) is that enough to be considered? By the time this would happen I will be 62 years old and quite unlikely to find other employment, on the basis of a settlement being refused and the option then would be bankruptcy, I would plan to take a pension I have and receive a lump sum of 16k, can this 16k be touched by the bankruptcy?
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kallis3
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by kallis3 » Thu May 10, 2018 8:16 am
Sorry, I should have made it clearer - it's six months worth of your redundancy payout. As regards your pension, I believe it would be taken in BR. I could be wrong though.
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Lisa Thomas
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by Lisa Thomas » Thu May 10, 2018 8:24 am
den162 wrote:
Lisa Thomas wrote:
You could offer the remaining balance of the redundancy money to offer an F&F to vary and finish the IVA early, on the basis there will be no dividend to creditors if Bankruptcy ensues but that will depend on your circumstances/assets etc.

Thanks Lisa, I did read somewhere about the 'offer' option and I would seriously consider that, although by my calculation the redundancy payout would be approximately 35% of the debt (15k of 40k) is that enough to be considered? By the time this would happen I will be 62 years old and quite unlikely to find other employment, on the basis of a settlement being refused and the option then would be bankruptcy, I would plan to take a pension I have and receive a lump sum of 16k, can this 16k be touched by the bankruptcy?


Hi

The offer wouldn't be based on the debt - it would be based on the remaining contributions you would pay if your IVA continued in the normal way.

How much are your current contributions?

Is yours a 5 year IVA with a 1 year extension for equity (and if so do you have over £5k of equitable interest?)

i.e how many payments do you have left? Multiply it by your monthly payments and this will give you your figure on which to make an offer.
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den162
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by den162 » Thu May 10, 2018 9:22 am
Lisa Thomas wrote:
den162 wrote:
Lisa Thomas wrote:
You could offer the remaining balance of the redundancy money to offer an F&F to vary and finish the IVA early, on the basis there will be no dividend to creditors if Bankruptcy ensues but that will depend on your circumstances/assets etc.

Thanks Lisa, I did read somewhere about the 'offer' option and I would seriously consider that, although by my calculation the redundancy payout would be approximately 35% of the debt (15k of 40k) is that enough to be considered? By the time this would happen I will be 62 years old and quite unlikely to find other employment, on the basis of a settlement being refused and the option then would be bankruptcy, I would plan to take a pension I have and receive a lump sum of 16k, can this 16k be touched by the bankruptcy?


Hi

The offer wouldn't be based on the debt - it would be based on the remaining contributions you would pay if your IVA continued in the normal way.

How much are your current contributions?

Is yours a 5 year IVA with a 1 year extension for equity (and if so do you have over £5k of equitable interest?)

i.e how many payments do you have left? Multiply it by your monthly payments and this will give you your figure on which to make an offer.


Aaah that changes things, so I have a 5 year IVA with zero equitable interest. My payments are 600 per month with 54 payments remaining, so £32,400, that makes it more interesting for them I guess.

One more thing, if they do accept an offer, is that the complete end of it and they cannot take any of a pension lump sum from then on?
Many thanks
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kallis3
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by kallis3 » Thu May 10, 2018 9:43 am
Once you have completed your pension is safe.
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den162
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by den162 » Thu May 10, 2018 11:03 am
kallis3 wrote:
Once you have completed your pension is safe.

That's great, thanks for your help guys
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Lisa Thomas
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by Lisa Thomas » Thu May 10, 2018 3:02 pm
£32.4k is what you would need to base your offer on.
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Foggy
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by Foggy » Thu May 10, 2018 3:35 pm
To be clear: (My understanding) You are allowed to keep the equivalent amount of 6 months salary from your redundancy compensation, with which to live and continue paying the IVA monthly. The creditors WILL get the rest.

If there is a likelyhood of you gaining new employment, the IVA will continue until it's projected end or until the amount paid in meets the sum of the full original debt, fees and possible statutory interest, whichever comes first.

What Lisa is suggesting is that you offer the whole lot and ask the creditors to call it quits as they would get no more by any other means and it gets you out of their collective hair.

They do, depending on the individual circumstances, accept these kinds of offers and most creditors are not ogres. If you were a 25 year old qualified electrician it might be a different story of course.
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den162
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by den162 » Thu May 10, 2018 6:47 pm
Foggy wrote:
To be clear: (My understanding) You are allowed to keep the equivalent amount of 6 months salary from your redundancy compensation, with which to live and continue paying the IVA monthly. The creditors WILL get the rest.

If there is a likelyhood of you gaining new employment, the IVA will continue until it's projected end or until the amount paid in meets the sum of the full original debt, fees and possible statutory interest, whichever comes first.

What Lisa is suggesting is that you offer the whole lot and ask the creditors to call it quits as they would get no more by any other means and it gets you out of their collective hair.

They do, depending on the individual circumstances, accept these kinds of offers and most creditors are not ogres. If you were a 25 year old qualified electrician it might be a different story of course.

My intention would be to offer around 50% of the remaining amount of 32.4k, the redundancy payout would be about 16k, is it possible in anyone's opinion that this offer would be accepted? given the fact that I'm unlikely to get another job as I'm close to 62, the alternative unfortunately would be bankruptcy
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Foggy
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by Foggy » Thu May 10, 2018 7:46 pm
I have seen smaller offers accepted ... remember that they are also saving on admin costs and getting the toxic debt off of their books to boot.
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Lisa Thomas
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by Lisa Thomas » Fri May 11, 2018 8:25 am
It's hard to say as it really is up to the creditors but given they get closure much sooner it would be nice to think they would consider it seriously.
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