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Topic starter
11/01/2012 2:33 pm
We are about to make the final payment on our protected trust deed and can't wait for the rest of our lives to begin.
However, my wife's job is under threat at the moment. She should be OK but what would happen if she was made redundant and received a payment AFTER we had made our 36th monthly payment but BEFORE we had been formally discharged?
Would the IP have a claim on the redundancy money?
As I say, I reckon it's unlikely but don't want any shocks at this late stage!
Any advice would be greatly appreciated.
11/01/2012 2:43 pm
Until you are discharged I believe your trustee would be entitled to make a claim(possibly),so dont win the lottery either.
Normally the redundancy money is used for day to day living until a new job is found,only then should any excess be scooped up by the trust deed.
Would it be a substantial amount?
What company are you with?(for the trust deed).
It'd be tempted to give them a call and ask the question as I have a feeling different companies may do things differently regarding a redundancy pay off.
Paul
Trust deed completed Jan 2012,Trustee discharge Nov 2012.
A new dawn.
12/01/2012 9:43 am
Hi BouncingBack.
Congratulations on getting near the very end of your trust deed. I'm glad to hear that you're feeling so positive about the future.
The issue of a windfall prior to discharge is a difficult one. Even though you have done what you promised to, I'm sure a Trustee would consider that legally they have no option other than to collect the windfall for the benefit of creditors.
The usual position with redundancy payments, at any point during a trust deed, is:
1 - You keep the statutory element of the payment. This is the amount the employer must pay you legally. This money is kept as it may be needed to support you while looking for a new job.
2 - Anything extra is paid over to the trust deed. Some people may benefit from clauses in their contract that offer them redundancy terms better than the legal minimum, or may negotiate such an outcome for example.
I think the best thing to be doing will be to check in with the trust deed firm to confirm they have received your last payment, and to get them to let you know how long they anticipate that it will take to discharge you. It shouldn't be more than a few weeks if all matters have been completed at your end.
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12/01/2012 10:05 am
You may wish to check the actual terms of your trust deed Bouncing Back. I believe that a standard format used by many insolvency practitioners does state a timeframe regarding "acquirenda", which is what this would be classed as. If you have met all of your obligations and the lump sum comes your way after any stated time period has expired then legally a trustee might find it difficult to force you to hand that money over, even if you are not yet formally discharged.
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