I am in a trust deed just now, and I have been told that the co will take most of the money apart from my statuatory entitlement which is about 1/3 of the money. Is this correct. I have offered to pay off the rest of the trust deed with the money I would be reciving as I only have one year left to go...any advice ?
Thought I would add more to this, to hopefully get a more indepth response. I thought when I entered my Trust Deed that the ?ú400 per month I am paying would be all I needed to pay unless I won the lottery or received a large inheritance. Now that I am being made redundant, the ?ú14k approx that I will receive, well approx ?ú10k of this will go to the Trust Deed leaving me about ?ú4k. If i didnt tell anyone and got a new job, it means that the money could have been moved to a differnt bank withount anyone knowing, the fact that I have been honest and upfront, seems as though I am being penalised. yes I know I had a huge debt and creditors need to be paid back, but I think most of the money I am paying back is the the company fees, not to creditors. Is there any way that I can keep a bit more of my redundancy and not lose 2/3rds of it !
Hi ScotAl,
We'll need Mark or Kevin to shed some further light on this subject. Certainly you'll need some of the money to make sure you're OK until you've found another job.
Hopefully one of them will be along to add their thoughts soon.....
Hi ScotAl
Here you go = Chapter and verse:
Redundancy
Where a debtor is made redundant and receives a severance payment from his employer, the question arises as to whether this payment, or part of it, vests in the trustee under Section 32(6) of the Act.
The Accountant understands the facts of the case to be as follows.
During the relevant period, as defined by Section 32(10) of the Act, Mr McGrail was made redundant and received a severance payment of ?ú5,050. This sum was made up of four elements:
Statutory redundancy payment ?ú 810
Payment in lieu of notice ?ú 810
Company ex gratia payment ?ú1,000
Additional payment based on years of service & wages ?ú2,430
?ú5,050
The trustee conceded the payment in lieu of notice was income but claimed the remaining ?ú4,240 as acquirenda. This approach was later approved by the sheriff. The debtor disputed this approach and applied to the sheriff that this amount be excluded from vesting in the trustee, under Section 31(6) of the Act.
After hearing the solicitor for the debtor and for the trustee, the sheriff held that:
#61607; the statutory redundancy payment of ?ú810 fell to be regarded as alimentary in nature and therefore as income which did not vest in the trustee;
#61607; the other payments made by the company which were voluntary did vest in the trustee.
When dealing with payments made on redundancy, it will be necessary for trustees to identify that part which represents the debtorÔÇÖs statutory entitlement and care will be required in those cases, such as McGrail, where it is company policy to pay an enhanced sum. In some cases such an enhanced sum might be loosely termed the ÔÇÿredundancy paymentÔÇÖ.
Once a debtor has received his statutory redundancy payment, the trustee should consider whether a contribution or increased contribution should be sought. In this regard, the trustee should bear in mind that receipt of a redundancy payment does not immediately debar the debtor from receiving unemployment benefit under Section 20(3A) of the Social Security Act 1975.
Hope this helps
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
Hi Mark
Thank you so much for the reply....I am trying to understand most of it and I think I do. Since I offered to pay the outstanding amount of my TD to the company, I thought that figure would have been fine, or a certain percentage to them. Would it be possible for someone to alledgedly " buy me out " I have heard that someone can pay the rest of my balance on the TD for me....this means that obviously I would pay them, but also means I get to keep some of the money. I just think it is so unfair to lose so much of the redundancy payment.
Any advice you can give would be gratefuly appreciated.
Scot.
Hi ScotAl,
it is unfortunate but I'm afraid Mark is right. You get to keep the statutory element but the trustee is allowed to claim the rest.
It is often possible for a third party to "buy you out" of the trust deed by making a lump sum payment, but it would have to be with their own funds, ie additional to your redundancy money.
Have you found new employment already ScotAl? If not, you should be able to get your monthly contributions suspended at least.
Hi Kevin.
Thanks for the reply. I am currently on dis-placement leave, which ends on 23rd Sept, thereafter I will need a new job. So if after that date I am still " unemployed " should my contributions be frozen or suspended !
Hi Scotal
Should you continue to be unemployed, you should contact your Trustee to suspend payment, although they will most likely extend the TD period to catch up with any missed payments.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
With a bit of luck ScotAl, your trustee may not look to extend the Trust Deed, given that an unanticipated lump sum will have been paid in from your redundancy money. We certainly would look at it that way, so if they do suggest an extension to the term I would fight my corner if I were you.
Kevin