Losing your job can be a big problem for your IVA unless you can get a new job quickly. Having redundancy pay can help through this period – but some of your redundancy pay may have to be paid into your IVA.
Here I’ll describe what the 2016 IVA protocol Individual Voluntary Arrangement says. Most IVAs have similar provisions for redundancy. It’s a good idea to check your own IVA paperwork and, if you’re not sure, your IVA firm will explain what will happen.
Although the redundancy terms in most IVAs are the same, people’s situations can be very different, depending on how easy it will be to find a new job and how much redundancy pay you get.
Telling your IVA firm
You don’t have to tell your IVA firm when find out your job is at risk of redundancy, but it may be a good idea. Losing your job can be very stressful and talking through what is likely to happen with your IVA will help remove some of the uncertainty for you.
You have to tell your IVA firm within 14 days of getting the notice of redundancy which gives the date your employment will end. You should inform your IVA firm even if you don’t get any redundancy pay.
Don’t think about not telling them, even if you can walk into another job straight away. That is a serious breach of your IVA. You will be asked for your P45 at your IVA annual review so it will be discovered.
Some redundancy money may have to be paid into your IVA
You have to inform your IVA firm when you get your redundancy pay.
You can keep six times what your normal monthly take-home pay is. If your redundancy pay is more than this, the extra amount has to be paid to your IVA firm within 14 days.
End your IVA early?
If you have to hand over a lot of money to your IVA firm, you may think this will end your IVA.
For example, if your IVA payments are usually £150 a month and there is 18 months to go in your IVA, you might assume that if you have to pay £4,000 from your redundancy, that that is a lot more than your remaining 18 months of payments.
But this isn’t the way IVAs work. In exchange for your creditors agreeing to write off some of your debts at the end of your IVA, they are entitled to receive “windfall” payments you may get during the IVA.
Your IVA will only end early if your redundancy payout is so large that it will mean that you have repaid all the debts in your IVA in full, without any write-off, and also the IVA fees. If you think you may be able to do this, talk to your IVA firm and they will look at the calculations.
During the next six months
As you have kept six months worth of pay, you can use this to carry on making your normal IVA payments whilst you are job-hunting.
If you get a job in this time, you have to pay the remainder of the six months redundancy money into your IVA. So if you get a job at four months, you pay the remaining two months into your IVA.
This can feel harsh if you have ex-colleagues who are putting in a new kitchen or going on holiday with some of their redundancy money, but it is the agreement you made with your creditors to get some of your debts written off.
If the job you get is at lower pay, or involves extra costs such as commuting, you need to talk to your IVA firm about whether your IVA payments can be adjusted to cover this. If there is a significant change, your creditors may have to approve the lower amount.
No job at the end of 6 months?
If you haven’t got a job at the end of six months, your IVA firm will probably give you a six- or 9-month payment break to carry on trying. This time is added onto the end of your IVA.
If you are still out of work at the end of a payment break, your IVA is at risk of failing. Ask your IVA company if your IVA can be treated as closed because you have done your best. Your creditors have to agree to this and it will depend on how much you have paid and your situation.
“I think I may be made redundant in a few months, should I start an IVA?”
Probably not! In this sort of situation it is better to wait and see what happens: if you are made redundant, how much redundancy pay you will get, how long it will take to find a new job and what the pay will be then.
If you need a debt solution now, look at a debt management plan (DMP) instead. IVAs are not very flexible and can fail, DMPs can just be changed. They are a much better temporary solution until you know what will happen to your job.
If you get a good redundancy payout and a new job easily, you will be able to use the redundancy money to settle some or all of your debts with no need for an IVA. You may want to use some of your redundancy money to train for a new skill. You may need to move to get a good job. All these things are harder when you are in an IVA.
“My partner has been made redundant”
If your partner who does not have an IVA is made redundant, the redundancy pay they get is all theirs – it does not have to be paid into your IVA.
If they get a job quickly, one option may be for them to use some of their redundancy pay to settle your IVA early. But don’t rush to do this, your debts are under control with no interest being added in your IVA. Waiting to see how they get on in their new job would be sensible. It may well be better for your partner to use any spare money to pay off their own debts, or to clear any joint debts that you have.
If they don’t get a new job quickly and didn’t get a lot of redundancy money, you may soon need to be paying more of the household bills and find it hard to manage, see Can’t afford your IVA payments for your options.
Car finance – problems in an IVA
Choosing between an IVA and a DMP
Should I sell my house to end my IVA?
Suzanna Walker says
Good common sense advice anyone in this situation should heed.
Kelly says
Hi my pay plan have told me that I can keep 6 months of my redundancy but if I get a job a month into my 6 months then I have to give them it. I have checked my proposal and it states that I’m allowed to keep 6 months redundancy anything after that to give them. It dosent state that if I find a job within that 6 months they also take the rest of the months. Please can you advise where I stand or are they allowed to change proposal without my consent and signature.
Sara (Debt Camel) says
Are you sure there isn’t a clause that says something like “At the point new employment is obtained the supervisor will review the consumer’s IVA contributions and at that point there will be an expectation that any remaining redundancy funds will be paid into the IVA, and the consumer’s performance in this regard will be reported to creditors.”?
Kelly says
No 1.10 of my redundancy clause states I will pay any access reduncy after I take the 6 months off if there is no amount after the 6 months is deducted for me to use to find work there will be nothing to pay but I must keep my supervisor informed of employment. So basically I x my net pay by 6 months keep that any excess is there’s but with the 6 months carry on making my normal Iva payments. So don’t know why they are saying if I find work one week into my 6 months I have to pay them all of the rest as Well as that’s not in my proposal.
Sara (Debt Camel) says
I suggest you ask them where it says this in your IVA as you can’t see it.
Kelly says
Thank you. I see that the redundancy page you put on here was 2016 protocol. But my proposal was 2013 can they just change it?
Sara (Debt Camel) says
The 2013 Protocol has the paragraph I quoted in 10.5(a), see https://www.gov.uk/government/publications/individual-voluntary-arrangement-iva-protocol.
K says
Hi I am getting 12 weeks lieu of notice but they can call me into work does that have to be paid into iva as I’m still employed those 12 weeks
Sara (Debt Camel) says
So you can’t get a new job until it ends?
K says
I don’t think so as it’s my 12 weeks notice in lieu and they said it is there intention I don’t have to work but if needed will call me. They said it will be my net pay after tax and NI
Sara (Debt Camel) says
Sounds like its three months work to me. Are you getting any redundancy pay as well?
K says
Yes so I know I have to give anything after my six months redundancy if I don’t find s job. Also I have to give them 50 % of my holiday pay I think. But with the 12 weeks I don’t know if they classed that as part of the redundancy as I have to pay tax and might be called into work if needed. It just states in my letter it is there intention I will not be required to work my notice
Sara (Debt Camel) says
You need to talk to your IVA firm, but if this is pay in lieu and you may have to work, this sounds to me like normal wages until the end of the three month period.
K says
Hi I have lost my job but now might have to care for my mother in law so will be on carers allowance so won’t have the money for my iva. I have already paid my total agreed amount after the rest was written off. Do you think I can ask them to settle now as finished full and final to date as don’t really want it to fail
Sara (Debt Camel) says
How far into your IVA are you?
Are you getting any redundancy pay?
Can you say some more about “I have already paid my total agreed amount after the rest was written off. “
K says
I am 4 years just gone into iva and the total amount was 18000 with 14000 written off I have paid the 18000 so far and yes I did get redundancy oay.
Sara (Debt Camel) says
And have you paid the redundancy money in? If you have, then I would expect your IVA firm to be sympathetic to proposing that your IVA should be treated as completed if you can produce any evidence about the your MiLs need for care.
K says
Thank you. And no they are just calculating it now. Do you mean all my redundancy or just over the six months?
Marc Leit says
Hi
I’ve been make redundancy, and it will end on 31/12/19 and my 6 years IVA will end on 01/03/20.
So I can keep up 6 months of my income, what it will be about, so what happens after 01/03, with the 4 months remaining of my redundancy if I find job after 01/03 ?
Many thanks
M L
Sara (Debt Camel) says
That is very unfortunate timing for you. I think you need to look at the exact clauses in your IVA and talk to your IVA firm about this.
Nikki says
HI,
I am being made redundant at end of March 2020, I have been offered a retention bonus to stay. This will be used by me whilst I look for another job come March as I will not be entitled to redundancy pay.
My question is will I get to keep 6 months of salary from this as it won’t be declared as redundancy pay but it is a part of my redundancy contract?
If I don’t get to keep the 6 months salary from it would I just have to pay over the 50% as per any additional income received?
THank you
Adam says
Hi,
I am being made redundant in February 2020 and my last IVA payment is March 2020. My redundancy is not 6 months of my wages. I do not have another job to go to but I can make the final payment. Will they take any of my redundancy or will my final payment be accepted and my IVA closed?
Sara (Debt Camel) says
So you are allowed to keep 6 months of the redundancy pay to let you carry on with the payments. As you have less than that, they won’t expect you to pay anything over. I suggest you tell them what has happened and make the final payments and ask for your IVA to be completed.
(I am assuming you don’t have a house with equity.)
Adam says
My IVA was originally agreed to be over 6 years due to my paying less than £100 a month. They also had 50% of any earnings over 10% on top of my wages. Can they extend my IVA for another year? Also in my final payslip from work my notice will be paid which will go above my 10% so will 50%of this need to be paid to my IVA or will it be considered as part of my redundancy pay?
Sherith says
Hi
I was made redundant back in September 2019, my iva ended on the 28th January 2020
As I was 4 months away from my final payment I didn’t think I was supposed to tell my supervisor, I only make them aware of that about 2weeks ago,
Will they ask me to turn over some of my redundancy money, I’m currently not working with no benefits. I’m unwell at the moment and not able to go back to work for now.
Sara (Debt Camel) says
You should have told them, but if you have been unwell, I hope they will take that into consideration. How large was the redundancy payments you received?
Sherith says
Just under £25000
Sara (Debt Camel) says
In that case your IVA firm may well expect a lot to be paid into your IVA. As the article above says, you can keep 6 months worth of pay. How large were the debts in your IVA? Are your health problems serious?
Adam says
I am being made redundant 6th March 2020. My last IVA payment is March 2020 which i intend to pay. I have informed them about my redundancy and sent them the redundancy amount. It is less than 6 months so nothing is owed but they have said if i find employment in the next 6 months the excess funds will need to be paid. Based on my IVA should be closed when my last payment is made are they likely to extend my plan to see if i find work in the next 6 months. I do not own a home nor have i missed any payments. Or is the statement more of a formality?
Sara (Debt Camel) says
How many weeks redundancy are you being paid? Is it going to be easy to find another job/
Adam says
I would have roughly 12 weeks worth of redundancy pay. I am actively looking for another job but obviously concerned that they will not close my plan. Meaning even if I found another job in April/May 20202 I will still owe them what ever is left. My final payslip is 20th March 2020 with 6days worth of pay. My redundancy pay will bot br paid to me until April 2020 which is outside my IVA plan. Plus some of that will need to go to covering the lack of wages i received in March.
Sara (Debt Camel) says
when was your last IVA payment?
Adam says
February 2020 and then my final was be March 2020, the end of a 6year plan.
To give you an update on my situation. I called the company dealing with my IVA a few weeks before my final payment. I was informed that once I had made my final payment I should cancel any standing orders to them and once I have sent them my P60 they would put plans in motion to close my IVA. Also I would not need to email anymore payslips over to them, nothing was stated about if I found work outside my IVA period but within 6 months. I recieved my redundancy payment today 20th April which is out side my IVA time period. I started a new job 1st April so this also is outside my IVA period. They have now asked me for proof of my redundancy money payment which I had already sent them evidence on what I would receive and they have asked if I have found alternate work. I have said that my redundancy was paid in April which is outside my IVA period and I did not find work before 31st March which my P60 would prove so my redundancy should not be taken in to account. I am just waiting to see what they say.
Donna says
Hi wondering what happens if you are in Iva and you get to keep 6 months pay and you find a job that’s half of the pay you we’re earning when you took out your Iva do you get to keep the difference to keep the pay what you used to get or you have to pay all of the 6 months they have left you into your Iva even tho you be earning a lot less
Sara (Debt Camel) says
This, I suspect, may be a depressing common question in the next 6-12 months.
It’s important to look at your overall situation, as the answer for one person may not be the same as another. Someone who has just started their IVA, has no assets to protect and is only paying £85 a month is in a very different position to someone whose IVA has 6 months to run, has a how to protect and who is currently paying £380 a month.
Some new rules have been brought in because of Cornavirus:
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. The [borrower] should be explicitly told that they may have to include an amount that has been paid by way of redundancy into the arrangement in future, if the supervisor decides to use that discretion.
But that is rather vague.
So could you say some more about your situation. In particular are you having a worry “just in case” or have you been told you are likely to be made redundant?
Dave says
Hi, I’m being made redundant in a few weeks and wish to use some of the redundancy to pay for hgv licences to enable me to get another job… Is this allowed.
Sara (Debt Camel) says
is your redundancy related to Coronavirus?
Dave says
Yes, I manufactured parts for airbus and the bottom fell out, so my company have had to make wholesale changes, my job being one of them… I’ve been furloughed for 6 weeks and now this.
My plan was to continue to make my normal monthly iva payments whilst obtaining my hgv licences to get another job.
Sara (Debt Camel) says
can I ask how far through your IVA you are?
what are your monthly payments?
how much redundancy are you getting?
Dave says
Began last December… Payments are 505 a month, redundancy is 6000
mike says
Hi Sara,
My partner and I are starting year 4 of a 6 year IVA, but disaster has hit as my partner has been made redundant, well terminated contract! There’s no redundancy pay has she has only been there 5 months. (so is this still called being made redundant?)
Anyway, I gather we have to now tell the IVA about this for all the obvious reasons.
My question is about myself going back to work rather than my wife. If I was to do that usually I would have to give the IVA 50% of any additional earnings (I’m retired and receive a public pension) but if my wife isn’t working would that still be the case, do you think?
Sara (Debt Camel) says
Have you read the link at the top of the page on coronavirus? You could ask for a payment break while your wife tries to get another job, how difficult will she find that?
Do you have a house with equity or are you renting?
Kate says
Hi, I work part-time in more than one job. I was recently made redundant from one job and should be receiving some redundancy money. I have been lucky enough to quickly find another part-time job but it is less money. Will I have to give all the redundancy money towards the iva? I now earn £149 less a month. Thank you.
Sara (Debt Camel) says
How much is the redundancy money?
How much were the monthly income from the job you have lost?
How much are your new monthly earnings from the replacement job going to be?
Kate says
The redundancy money will be £800. The monthly pay from the job I lost was £357 and the monthly earnings from the new job is £208.
I currently have 3 jobs in total. The first one I get £380 a month, the second is normally £380 a month but I am on furlough so at the moment it’s only £308. Plus the new job is £208 a month. Thank you.
Sara (Debt Camel) says
Sorry some more questions so I can see more of the picture:
How far through your IVA are you?
How were you managing the IVA repayments before the pandemic?
Is the job you are currently on furlugh for likely to get back to normal soon or are you worried you may be made redundant there too?
Are you renting or buying?
Kate says
Hi,
I only started my IVA last December. I was managing my payments before the pandemic without any problem. Although I am single I live with my adult son who works full time and pays me a decent amount each month, he also does two weeks shopping. They took all this into account along with my income when I was accepted for the IVA. I’m still able to make my payments ok. Regarding the job I am on furlough for, it’s a small theatre so not sure if or when they might return to normal so there is a fair chance I could be made redundant again, if that happened I would continue in my other two jobs but would have to apply for universal credit until I find another job. Does that mean my IVA will fail? I informed the IVA company a while ago that I had lost one job but assured them I could still make my regular payments and they were ok with that. They don’t yet know about my new job or the redundancy pay. If I work but have to apply for universal credit would I be allowed to continue my IVA? We rent btw. Sorry for the long reply and thanks for your help.
Sara (Debt Camel) says
last two questions – i think you have several quite different options so it’s good to look at all of them or rule any out …
– how large were the debts going into your IVA?
– do you own a car or have one on finances? if so how much is the car worth?
Your long reply is very helpful!
Kate says
Hi,
My debts going into the IVA were £21,000 and I don’t have a car. Thanks again.
Maggie says
My husband is being made redundant. No pay out as he has only worked there 18 months
We have managed the IVA payment while he has been on furlough by taking a mortgage holiday but now our incomes are going to halve we will struggle to pay the mortgage even if we pay nothing to the IVA.
I don’t think he can get benefits as I am still working.
I know we have to tell his IVA company but I’m scared and don’t know what to ask for. He has just started his 4th year.
Sara (Debt Camel) says
I think he needs to tell his IVA firm right away.
I have just written an article based around this situation: https://debtcamel.co.uk/furlough-redundant-mortgage-iva/
Maggie says
Thanks, he will look into benefits and phone his IVA this week.
Penny says
I have been made redundant start of Oct and got 7 wks redundancy pay. Looking to start a new job with half the hours at a lesser wage so will be short £300 a month on income. I will be claiming UC to top up but that means 5 weeks with no money so does that mean i wont have to add my redundancy pay to IVA as i will be using to live on.
Sara (Debt Camel) says
You need to talk to your IVA firm and tell them what is happening.
As the article above says, most IVA will let you keep 6 months of redundancy payments to get you through to finding a new job. I would expect that this can also be used to cover the gap until you are paid UC.
But at that point will you really be able to afford the normal IVA payments again?
How much are you paying a month?
How far through your IVA are you?
Do you have a mortgage or are you renting?
Thomas says
Hi Sara. I have been made redundant last October and received approximately 9 weeks salary. I have a mortgage, secured loan and an Iva arrangement and my wife needs Lupus injections not available on the NHS. She’s been on these for 9 years costing £140 per week(hence the debt). I’ve managed to get a temporary part time job but my income has reduced dramatically. Because I’ve reached retirement age I can’t claim any benefits. Any advice would be greatly appreciated.
Sara (Debt Camel) says
Some questions:
– have you had a 6 month payment holiday on both mortgage and secured loan?
– how far into the IVA are you? have you taken a payment break?
– how much equity is there in your house?
Thomas says
Hi Sara. Have had payment holiday on mortgage and secured loan when I was on furlough for 6 months before being made redundant. I am 2 years into my Iva and have had 2 months payment break plus 20 percent reduction for 6 months when I was on furlough. If I take into account what is owed on mortgage, secured loan and Iva I’ve got approximately 60,000 equity in my house. Hi
Sara (Debt Camel) says
That sounds very difficult, especially with the ongoing health costs and your age. I suggest you talk to your local Citizens Advice who can advise on both benefits and the debts.
Thomas says
Hi Sara. Thanks for your advice. It is very difficult and I feel mentally jaded. There is no obvious solution and I’ve already spoken to my local citizens advice. If I managed to sell my house there wouldn’t be enough equity left to buy anything decent and obviously my credit rating is zero so I couldn’t get a mortgage. Just going to take each day as it comes. Hope for the best prepare for the worse.
Simon p says
Iv had a iva from vanguard and has changed hands to I think evergreen. At same time I got made refunded from work. Told them when I knew about time to leave. I got over 20k redundancy, phone them about amounts to pay. Say get back to me. Waited and waited phoned back says iv got to pay 9k. So 2 months after redundancy I phone 3or more time and I got them to receive money thought well that’s paid. I pay for the people I owe next car to mom etc. After 6months I got phone call of evergreen that I had not made this month’s payment I thought I’d finished it . They seem to be after another 8k to finish. I got uni credit now and that’s it I thought I paid all bill off. Just think iv been treated wrong with me doing all the phone work to 2 company’s I think they left me in limbo and company not good. So now iv got to find 8k to finish lva which thought I’d finished. Do I pay 8k or let it default I can’t get answer need advice. Ty
Sara (Debt Camel) says
VAnguard IVAs are now being managed by Ebenegate?
How long does your IVA have to go?
What were the debts at the start of your IVA, what were your monthly payments and how many did you make/
“uni credit” you mean you have started a uni course and your only income is a grant?
Elaine says
I have recently been made redundant and have been paid redundancy pay plus three months salary in lieu of notice. If beleive I was misled when I took my IVA. I was told I could repay my IVA within two years if I wished. I have now been told this is not the case. I wanted to repay my debt which was agreed £492 over 6 years. I have paid two years and not defaulted. In May I will be reliant on state pension and will not be able to afford by IVA. I have recently had major back surgery and also suffer from severe ancxiety and depression, I will not be working again. My redundancy payment was £31,000 which I beleive is more than enough to repay my debt.
Should I accept the 6 x salary and pay IVA the remainder. In May my IVA will default. Would they write off the IVA?
Please help
Elaine
Sara (Debt Camel) says
how large were the debts going into your IVA?
do you still have a mortgage?
Caroline says
Hi Sara.
I’m in the process of redundancy, but arguing it (5 years service) Duly informed Payplan upon receiving notice, who then told me they would be taking 50% of anything in excess of my “normal salary plus 10%”
I understand this to be this case on a normal, working salary, but this is my final salary, plus holiday pay and all classed as my redundancy package.
Payplan are calling it additional income/ windfall and saying “it’s theirs”
They are basically “allowing me” to keep my 5 weeks statutory redundancy pay, and 4 weeks of my 5 weeks notice pay.
This seems extremely unfair when you’re “allowed” to keep 6 months redundancy pay but PP are only letting me keep 5 weeks redundancy pay and taking anything in excess of this. What am I supposed to live on until I get a new job?
What grates most is, I will be receiving >28 days holiday pay (18.5 of which were protected by the new government legislation for furloughed workers during JRCS and carried over from last year) But PP want half of this.
If they take half of my total money, I won’t be able to keep up my monthly payments and will need to request a payment holiday within 2 months. If they let me keep it, I should be able to maintain payments until I find a new job.
*IVA is only 16 months in. Has an additional 1yr added*
Sara (Debt Camel) says
hi Caroline,
this does sound very unfair. you could put in a formal complaint to ask them to change this – IVA firms have a lot of discretion.
But unless you are sure you will be back into a good job, it is also worth looking at your other options as you aren’t far into your IVA.
How large were the debts in your IVA? what were you paying a month to it?
Caroline says
£15k and £67 monthly. Nothing has been “set in stone” yet as it’s still in the consultation process, but after a lengthy “debate” with PP they seemed fairly determined this would be their course of action. Just trying to do what I can to prevent it from happening.
Sara (Debt Camel) says
I think you should be talking to PayPlan about a Debt Relief Order. Even if you hadn’t been made redundant, it may have been worth you failing your IVA to switch to a DRO as in a DRO your debts are cleared after a year and you don’t have to make any payments.
There isn’t much point in trying to get Payplan to change their mind about taking so much of your money now, if ending an IVA is actually a good idea for you.
John says
Hi I have Iva with creditfix and in November I would be into my final year
My wife works part time and by the middle of October she will be made redundant and she will be getting some redundancy and I do know she can keep 6 months of the money unless she gets a job earlier.
The issue is we desperately need a new bed and fridge and a new stair carpet and just wondered do you think we could use any of it to pay for this.
Also do you think if there would be a good chance of closing the iva with a small settlement figure if anything left.
Sara (Debt Camel) says
Do you both have IVAs? How likely is she to be able to find another job? Is her redundancy money more than 6 months pay?
John Robertson says
We are in a joint iva.
Can’t find anything yet.
She hazent got the letter as off yet cause she works in a residential place and the last 2 residents will be leaving by middle of October so will be told in the next couple of weeks so I’m preparing us for it.
Sara (Debt Camel) says
Legally you have two separate IVAs, not a joint one.
Do you know how large your wife’s debts were going into the IVA? Were there any joint debts? How much have you been paying a month to the IVA?
Can I ask if you are buying or renting? If renting, is this private or social?
John Robertson says
Hi we had some joint debts but will have to have a look but I had most on my own and I’ve just done the next review 2 days ago and asked me to see my incoming and outgoings but haven’t asked for my wife’s and don’t know why.
We pay 252.00 per month and we rent a housing association property.
Sara (Debt Camel) says
ok so it’s not really possible to say anything very definite until you know how large the debts included in her IVA are, including any joint debts AND how much redundancy pay she will get.
Her redundancy money can’t be taken to pay off your IVA. This is only relevant if her debts were pretty small and her redundancy money is large. In this case her IVA could be completed and she would get to keep any remaining redundancy money – that could be used to make a settlement offer on your IVA, if not your IVA would continue but your payment would be lower, possibly a lot lower, without her income.
But if the redundancy money won’t be enough to pay off all her debts (plus the IVA fees, plus possibly 8% a year interest) then she can keep 6 months of it to let her carry on paying the IVA while she looks for a new job. If she cant finf one at the end of 6 months, she can ask that her IVA is completed “on the basis of the funds paid to date”. And probably you won’t be able to carry on paying yours either, so at that point you could ask for the same.
You could ask to keep some of the redundancy money for urgent expensesbut this would probably mean taking a brwak from your IVAs, just prolonging things even further. Its up to you, but you may just want to get to the end as fast as possible.
It is a pity you ever opted for an IVA. Unless you had assets to protect, bankruptcy or a debt relief order would have been much better for you. But so near to the end of the IVA its best to try to get this competed, not failed.
John Robertson says
Hi thanks for your reply
We could not had a debt relief order cause the original amount was 46000 and it would of cost us a lot of money to go bankrupt which we don’t have spare cash going around.
Also why would they contact my bank about incoming and outgoings and not my wife’s.
Sara (Debt Camel) says
well your wife could probably have had a DRO and you could have gone bankrupt – it would have taken less than 3 months of those IVA payments to save up the bankruptcy fees…
I can’t answer the question about what your IVA firm has done, you would have to ask them.
John Robertson says
Well I have documents in cupboard at home so that will tell me so I will get back to you if I find anything out.
But thankyou for your help for know.
John Robertson says
Hi Im with creditfix and was wondering about taking a payment break because things are very tuff and my wife just been made redundant and also want to make sure I’m doing the right thing.
Also wondering would there be stipulations when taking payment break.
I have 11 months left would I benefit from a Dro or just keep it as it is.
Sara (Debt Camel) says
can you give some more details about your IVA – what is your current monthly payment? Were you finding this hard before your wife lost her job eg petrol and energy price rises? Is your wife getting redundancy pay? do you have a house with equity?
John Robertson says
Hi my current payment is 252 a month and yes it’s been hard before to pay it because of petrol prices and energy prices.
My wife’s redundancy is 2500 and we have a joint iva because of certain debts in both our names and we don’t own our house it’s a housing association we are with.
Sara (Debt Camel) says
This is so late on in your IVAs that it’s better to see if you can get them completed rather than look to switch to a DRO.
Your wife will be allowed to keep 6 months of income from the redundancy money so you can carry on paying the payments. You can also ask for them to be reduced if your expenses have gone up.
Paying 6 more months will take you up to only 5 months to go. If your wife hasn’t got a new job by then you can ask for your IVAs to be “completed on the basis of the payments made to date”.
John Robertson says
OK thank you but the thing is it won’t last for 6 months the redundancy so will cause problems.
Also I have asked for it to be completed a month ago but was told they won’t do it cause my original debt was 45000 and when it’s been written off it will only be 14000 so is this true.
Sara (Debt Camel) says
ok so how long will the redundancy last for? and what is the chance of your wife finding another job?
John Robertson says
About 4 months and it’s not easy at the moment to find a job but difficult to tell.
Sara (Debt Camel) says
I suggest you should probably try to carry on poaying it for the next few months until you run out of money. At that point if your wife has not found abother job you can ask for the IVA to be completed on the basis of what has been paid to date – you can insist that this proposal is oput to your creditors – Creditfix may not like it but it is not their choice.
If you aren’t sure and would like to talk this through with a debt adviser who can look at your full situation, I suggest you phone National Debtline on 0808 808 4000.
John Robertson says
OK thankyou for your advice and I will ring debt line and do you think they would be able to help me with this.
Sara (Debt Camel) says
They can help you look at the options. That doesn’t mean they can produce a great option for you.
Frank says
Hi,
I’m hoping you can help; I’m being made redundant on 31/03/22, where I’ll have 7 months left on my IVA that’s due to complete in October 2022. At that time I will have paid £7600 over 53 instalments to CreditFix out of a total debt figure of £12540. I currently pay them £209 every month.
The initial agreement was to pay £9060 over 60 months with the remaining £3480 being written off.
I understand that they will expect anything over 6 months salary to be paid to them which will be around £1950 out of my redundancy figure of £12760, which will leave me with £10810 for the 6 months to live on.
Can I at this stage agree to pay the remaining 7 months, and ask them to close the IVA, or do I have to keep paying the £209 every month instead (£1463 in total)?
If I want to close early will they then ask me for the full remaining amount at that time (£2990 plus £4k fees + £ interest) which would be around the full amount of my remaining redundancy pay?
Any advice on the best course of action to take or any advice would be useful.
Sara (Debt Camel) says
How likely is it that you will be able to find a new job on a similar salary?
Are you finding the current IVA payments easy to make?
Frank says
Hi Sara, I’ve provided my final payslip to credit fix which had my redundancy pay (£12760), and this also included my final base salary and holiday pay (for un-taken holiday), this came to a total of £14,647. I’ve been told that I need to transfer £4,441.93 towards the IVA, and I will be allowed to retain £10,206(6 months base pay)
Is my holiday pay and base salary usually taken into account for these calculations as I didn’t think they would class as a windfall, as I’ve earned the money through work and accrued holiday. Shouldn’t they just be deducting from the redundancy amount?
In response to your earlier questions, It may take some time to find new employment, however I can afford the monthly payments currently.
John says
Hi Sara I have an iva and I’m into my 5th year and my original debt is 46000 with creditfix and will pay 14000 once it has finished.
my wife was made redundant back in December 2022 and she had a small payment which would cover her till May but she having trouble to get job and did ask them if I could finish iva with payments made so far and they said they won’t do that without asking creditors is that right.
Sara (Debt Camel) says
Yes creditors have to agree to end an IVA early. But that isn’t a reason not to ask if this is your best option.
did your wife get redundancy money?
How is her job searching going?
do you have a house with equity?
Andy says
I took voluntary redundancy and will get £11130 plus £6500 pay on top minus deductions. I have £6400 + fees left i got an iva on 14k of debt. What’s the likely outcome ? I’d like to offer to pay it off, the iva amount. Will they most likely take this ?
Sara (Debt Camel) says
I have £6400 + fees left i got an iva on 14k of debt.
Is the 6400 the rest of your expected IVA payments?
Or have you paid 7600 so far, so plus 6400 will be the total of debt in your IVA?
Andy says
Yes the 6400 plus fees is whats left.
Sara (Debt Camel) says
sorry but I gave two ways you could have arrived at 6400.
is it the the rest of your expected IVA payments?
OR
have you paid 7600 so far, so plus 6400 will be the total of debt in your IVA?
Andy says
Sorry, i have 6400 left and have paid 800 ish over 8 or 9 payments.
Sara (Debt Camel) says
ok, in this case the 6400 has no meaning at all. It is an estimate at the start of how much you may pay in the IVA if things stay the same. If your income goes up more than your expenses, it would increase. If your expenses whent up more, it may decarease.
You still owe the 14,000 of the debts that went into the IVA at the start, plus the IVA fees , less what you have already paid.
Your IVA firm has to let you keep 6 months of wages from this amount and the rest has to be paid into your IVA. It doesnt look to me as though that will clear all your debts plus IVA fees. You can then carry on paying the IVA for 6 months while you look for another job.
Unless there is some reason (health? agoe) why you can’t get another job?
(Of course the sad thing is, if you had not started the IVA you could have settled your debts in full with this payout and not had an insolvency marker wrecking your credit record for another 5+ years. )
Andy says
I actually took voluntary as i want to do my hgv course. I only realised i had to let them know when i couldn’t go back on it. I was thinking about offering them what i owe to clear it. But sounds like this won’t be acceptable
Sara (Debt Camel) says
Do you have to pay to do this course?
Andy says
Yeah, 1600 plus medical and theories
Sara (Debt Camel) says
and how long will this training take and how long does it then take to pass the test so you can work?
You need to know the answers to these and then talk to your IVA firm about what can be done.
Andy says
Officially last day is 19th of September. License has been sent off last week, can only book theroey once it’s back and that will be a a few weeks yet, then a few weeks to wait for the theory tests. Then book on to practical test which is around a month wait once theory is done. This is 5 day course for the driving bit.
Thanks for all the help !
Sara (Debt Camel) says
ok so thats pretty quick. Talk to your IVA firm now what has to happen.
Darren Yaxley says
Hi Is there a cap on the fees that your IVA company can charge my daughter was made redundant and will have to pay her redundancy to the IVA company this almost pays off her original debt but with the fees added on she nearly owes the half of the original debt again this doesn’t seem fair any advice?
Sara (Debt Camel) says
Has she got a new job? If not she can keep 6 months worth of wages until she does.
The IVA t&Cs will have included details about the IVA fees. Which are very high…
Darren Yaxley says
Yes, she found a new job so there was no gap in working, her redundancy would cover what she now owes the IVA but not the original debt and extortionate fees that she owes the IVA company which are around £5000 so once she has paid the redundancy money she will be paying off mostly the fees, I thought theses companies were supposed to help people not grind them down to make a profit. Is there anything she can do?
Sara (Debt Camel) says
Most of them are very commercial companies mainly interested in their fees I am afraid.
if she had opted for a debt management plan instead, it would be very close to being paid off and she wouldnt have an insolvency marker on her credit record.
IVAs are skewed so if something goes badly wrong (perhaps she couldnt find another j0b) then the IVA fails but if something goes well (her redundancy windfall, an inheritance, a good promotion) then she has to pay a lot more into the IVA than she expected at the start. It’s an unfair systey biased against the person in debt.
But she is where she is.
Are her IVA payments affordable at the moment? See https://debtcamel.co.uk/help-ivas-cost-of-living/
Darren Yaxley says
She is on a lower wage I’m composing an email requesting that this is taken into account. Would raising a complaint as I believe she was badly advised at the start of the plan. I have rad through the contract which is extremely hard to understand.
Sara (Debt Camel) says
How long does the IVA have to go? and how much are her monthly payments?
Darren Yaxley says
It started in Jul 2020 for 60 months and this is the hall way point so 30 months left.
Sara (Debt Camel) says
well plenty of expenses have gone up since then I suggest she reads https://debtcamel.co.uk/help-ivas-cost-of-living/ and makes a list of everything that has gone up and askd for a reduction. So at least she can pay less for the rest of it.
It may well have been mis-sold but this is very hard to prove and there is no route to getting her complaint considered by an independent body – the Finacial Ombudsman is almost never able to look at an IVA misselling case.
Robert says
Hi i am being made redundant with with £17495 and a PILON of £7984. will the iva company take the total into consideration or just the 17495? Take home is £2213
Sara (Debt Camel) says
The total amount.
how easy will it be to find another job?
How far into your IVA are you?
robert says
Got another job to go to but its only a 3 month contract. My Iva started April 2019 also my new job is £7000 less a year so not sure i will be able to make the payments
Sara (Debt Camel) says
how large is your monthly IVA payment at the moment?
and how large were the debts that went into your IVA?
Robert says
it was £280 but it was reduced to £180 as i couldn’t afford paying £280
Was 30k paid back around 14k
Sara (Debt Camel) says
So I suggest you talk to your IVA firm and ask how much of the redundancy pay and PILON has to be paid into your IVA to settle it. Point out on your new lower wage you won’t be able to afford the repayments.
Stephanie Newton says
Hoping some one can help please, I’m being made redundant and will be getting a redundancy payment of £21500 I will soon be in my 4th year of my IVA so far I have paid £3430 into the plan and my monthly payment is £51 a month my total debt originally was £10400 I have spoken to Payplan and they have suggested a settlement figure does anyone know how much I will be asked to pay? I’m awaiting hearing back from them with the figure but they have said can take a couple weeks, just I have 2 options at work reskill in another job or take the redundancy
Sara (Debt Camel) says
How long do you have to take the decision?
How easy would it be to find another reasonable job if you take the redundancy?
Do you fancy the “reskilling”?
Steph says
I’m not wanting to reskill due to the shifts on offer, and also the “managing out” culture I think I would be able to get another job soon after, I have until 11/03 to opt in for redundancy option
Sara (Debt Camel) says
Well tell Payplan unless then can come up with the numbers before 11/03 you are worried you will Have to say no to the redundancy package as you have No idea what will happen to the Iva.