How to handle your job redundancy payment during an IVA

There is a time when you may find yourself out of employment. If you are in an IVA some considerations are made to ensure that you fully pay your debt from your redundancy income.

Ideally, if you receive some money as a payment for losing your job, all of it must be channeled to your Creditors.

Under the terms of an IVA agreement, cash windfall gains including redundancy payments must be paid to your Creditors. When you receive substantial amounts which are greater than the amount you owe, your IVA would be settled in full and closed at that moment.

On losing a job an IVA settlement is not imposed on you but your ability to get a new job and the cash available are put into consideration. In circumstances where you receive less money which is not enough to repay your debt at once, an IP has the capability of negotiating a new deal with your Creditors. When a new arrangement is agreed, you are given a fraction of the redundancy income.

With the assumption that you have made a few payments towards your IVA, for instance less than 12 months, it is unlikely that a new settlement is agreed except when the redundancy income received together with your offering are substantial.
In cases where the new arrangement fails due to your unwillingness to hand over the amount requested by the IP, your IVA is likely to fail. If this situation arises, Creditors will start all over again to collect outstanding debts against you.

Although different personal circumstances, it is wise enough to settle your IVA in full from any windfall gains as this ensures you a healthy financial future.

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