{"id":11381,"date":"2011-09-14T11:13:26","date_gmt":"2011-09-14T10:13:26","guid":{"rendered":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/?p=11381"},"modified":"2019-08-09T11:20:21","modified_gmt":"2019-08-09T10:20:21","slug":"iva-redundancy-lump-sum","status":"publish","type":"post","link":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/iva-redundancy-lump-sum\/","title":{"rendered":"IVA & Redundancy Lump Sum"},"content":{"rendered":"\n

The title of this piece might suggest that if you know how to go about it, you might be able to retain the full amount of any redundancy lump sum you receive if you are unfortunate enough to lose your job while in an Individual Voluntary Arrangement.<\/p>\n\n\n\n\n\n\n\n

In fact, you may have to contribute a large part of any monies you receive in this way, to your IVA. However, there are circumstances where you may be able to retain part or even all of the money. Much depends on how you yourself approach the issue, how your supervisor deals with the matter and crucially how your creditors view your changed circumstances. The first thing to do is to immediately inform your IVA supervisor, that is the insolvency practitioner (IP) whom the creditors have appointed, of your new circumstances. Your supervisor is obliged to keep your creditors informed and will advise you what to do. What you must avoid doing is blowing the money or a substantial part of it on, for example a holiday or on other extravagant expenditure, tempted as might well be to do that.<\/p>\n\n\n\n

\"Redundancy<\/figure>\n\n\n\n

Any redundancy lump sum is a windfall and the terms of your IVA proposal will spell out in some detail how such a windfall is to be treated. Normally, you will be required to contribute the full amount of any windfall into your IVA. However, given that this is a redundancy payment and not what ordinary people would usually classify as a windfall, you may be able to persuade your creditors to let you retain some part of it, to soften the blow of your loss of employment. Your supervisor should be able to convene a Meeting of Creditors quickly to determine how much of the redundancy lump sum you will be required to pay into the IVA. Your supervisor will seek to determine the extent of the changes in your circumstances, particularly relating to the loss of your income.<\/p>\n\n\n\n

You will be expected to apply for any benefits to which you may be entitled following the loss of your employment. Some of these benefits may be means tested and may be reduced due to your having received a redundancy lump sum. Some benefits may only be accessible to you after a period of time has elapsed. For example, after being unemployed for three months the benefits agency may begin to pay the interest on your mortgage, if you have one. If your mortgage is on a repayment basis rather than on an interest only basis, you may be in default if you do not make the full repayments. Your creditors will expected you to seek employment as soon as possible so as to restore your income to what it was before you lost your job. It may be necessary for you to learn new skills and to obtain appropriate training first. Your age, qualifications, skills, experience or even the location in which you live may be barriers to your gaining new employment.<\/p>\n\n\n\n

Your supervisor will take all these factors into account and prepare a new Income and Expenditure Statement for you.<\/p>\n\n\n\n

Your creditors may then be invited to consider a variation to your \nIVA, taking into account the redundancy lump sum, your reduced income \nand all of the new circumstances in which you find yourself. The \nvariation proposal may seek a reduction or a moratorium on your IVA \ncontributions for a period of time, perhaps from three to six months, \nwhile you receive training or seek or obtain employment. The variation \nproposal can also seek creditors\u2019 permission for you to retain a portion\n of the lump sum to cover your normal living expenses for a limited \nperiod of say three months, taking into account any benefits you are \nentitled to during that period. If you are unlikely to be able to obtain\n employment, the variation proposal may seek creditors\u2019 agreement to \naccept all or some of the redundancy lump sum in full and final \nsettlement of your IVA, even if the result of this were to mean that the\n dividend to your creditors would be less than the original estimated \ndividend which was projected in your IVA proposal.<\/p>\n\n\n\n

In a nutshell then, a redundancy lump sum is a windfall and you will \nnot be allowed to keep any part of it without the express permission of \nyour creditors. However, inform your supervisor of your new \ncircumstances and it may be that it will lead to a happy ending for you \nas well as for your creditors.<\/p>\n","protected":false},"excerpt":{"rendered":"

If you receive a lump sum redundancy payment whilst in an IVA, you might have contribute money into the IVA. However, there are circumstances where you may be able to retain part or even all of the money.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-11381","post","type-post","status-publish","format-standard","hentry","category-iva-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/11381","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=11381"}],"version-history":[{"count":1,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/11381\/revisions"}],"predecessor-version":[{"id":11391,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/11381\/revisions\/11391"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=11381"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=11381"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=11381"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}