Hi mondeo45911 and welcome.

The situation with redundancy payments is typically that the statutory element is kept and any additional amount is paid over to the trust deed. Whether that varies at all in connection to voluntary redundancy in these circumstances I don't know... I'm sure one of our experts will be able to share their view soon.

My concern is that if you choose to accept voluntary redundancy in order to move to a lower paid position you are, effectively, choosing to put yourself in a position where you can pay less to the trust deed each month.It sounds as though you'll be at least £300 per month worse off; how much do you pay into your trust deed each month currently?

Thanks for the reply.

We are currently paying £550 per month towards our Trust Deed for a debt of approx £40k. Our payments are increasing to £950 per month from this month due to my wife's increase in income. By this virtue, even with the drop in my income and the increase in fuel costs, we will still be paying £100 more towards the Trust Deed than at present.

I am taking this opportunity to change companies now because, if I wait, I could be made redundant within the next six months, and there may be no job opportunities for my current career at that time, so I would have no income and would not be able to maintain any payments to the Trust Deed. To be fair, the IP I deal with has no concerns about me changing the job; it's only the redundancy payment issue I would like clarified.

Incidentally, what is the value of car that you are allowed to have nowadays. I know that when we entered into the Trust Deed, it was no more than £1000 (had to sell my car and get a cheaper one then), but there was talk of it being increased to £3000.

Hi mondeo45911.

You and your IP have obviously got the contribution side of things well under control; thanks for clarifying the situation.

We'll need an indication from one of our experts regarding the redundancy side of things. I suspect it might be one of the issues that comes up from time to time here where an individual Trustee has to make a judgment on the situation rather than there being a hard and fast answer.

Regarding a car, the situation is now that a car worth under £3000 shouldn't be treated as an asset. I'm afraid I'm not certain whether this would apply in your case given that the trust deed began prior to this change in the amount. Another technical question that I know Mark, Kevin or Julie will be able to answer for you soon.

Hi both

A slightly complex one.

TDA is correct re the trustee having an interest in the statutory element. Scenario would be you accept voluntary redundancy as you describe, pay over the statutory element and move to the new job.

You payments would decrease due to the drop, but as they substantially increased due to your wifes income, then you need not worry as long as they don't fall below the figure agreed at the start.

Car is a slightly strange one where aquirenda v guidance! However, if your trustee has an interest in the car then that's a set amount I assume. Trade in the car and get your wife to finance the other one in her name.

Mark

Thanks for this advice.

If this is the case and I would see no benefit from getting the redundancy money in either a reduced monthly payment, an earlier finish to the TD, or being able to get some stuff we NEED, then the redundancy payment to me is pointless.

The situation with the car is that we were required to sell the car that we had and get a cheaper car. This car we got has already cost £500 in repairs, and now needs approx £450 more repairs to keep it on the road. Due to the mileage required for the new job, I need a more reliable and cheaper car to run. Surely they could allow some of the redundancy money to get this.

Hi mondeo45911.

I doubt that they'll allow you to keep some of the money because you want to buy a new car. They may well however allow you to keep some of the redundancy money depending upon how the payment is structured. You could obviously then spend that money as you choose.

Probably one to run by your trust deed company personally as I'm not sure there's a black and white answer we can give you.

It would certainly be interesting to hear the outcome of the situation as it may well be useful for other visitors in the future.