Author Topic: Can a creditor 'snatch' my redundancy payment?  (Read 1426 times)

South31

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Can a creditor 'snatch' my redundancy payment?
« on: Oct 03, 2011, 04:47:47 PM »
I've just discovered that I'm being pursued for a large debt incurred by a family member, as I acted as guarantor in an agreement.  I have no assets & live in a rented home so have nothign to offer (other than a few pounds per month), and to cap it all I am about to be made redundant.
 
As I've no other employment lined up at the moment, I'm worried that the lawyers will snatch my redundancy payment (not much, only worth about 10% of the debt) - can they do that or is there any form of legal protection covering redundancy payments, please?

James Falla

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Re: Can a creditor 'snatch' my redundancy payment?
« Reply #1 on: Oct 05, 2011, 05:06:25 PM »
Hi there South31
 
Generally speaking, a creditor will not be able to snatch your redundancy money. However if it is going to be paid into your bank account which is with the same bank to whom the large debt is owed then there is a risk due to the banking offset rules. If this is the case my advise would be to have your redundancy payment paid into a different bank if possible. If not as soon as it is paid you should move it yourself.
 
How are you planning to deal with this debt overall. If you gave a personal guarantee then the creditor will continue to pursue you for it. Given you have the redundancy lump sum coming to you perhaps you could consider using some of it to offer a full and final settlement IVA?
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South31

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Re: Can a creditor 'snatch' my redundancy payment?
« Reply #2 on: Oct 06, 2011, 02:33:32 PM »
Thanks for the reply. I've arranged to see Citizen's Advice for some guidance, but the appointment is not till 14th.  Meanwhile I've asked the solicitor to send me a copy of the agreement their action is based on, and to delay any further proceedings until I've taken advice on 14th (their letter, which is the first contact I've had from them, demanded full payment within 7 days, although they took 3 days between writing it & posting it).

James Falla

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Re: Can a creditor 'snatch' my redundancy payment?
« Reply #3 on: Oct 11, 2011, 06:17:28 PM »
It sounds as though the solicitor acting on behalf of the creditor has written a standard pay up or else letter South31. I think it would be mnost unlikely that they will take any further action before the 14th. However form what you have said you are liable for the debt so they are within their rights to continue their actions against you as and when they decide to do so. I hope you get on OK with the CAB. Please let us know what they say and dont hesitate to ask if you have any additional questions.
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