Should I take voluntary redundancy to clear huge debt?

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shouldi

Registered User
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Hi All

I'm hoping I can get some advice if possible

At the moment i'm drowning in debt & the company I work for is offering voluntary redundancy.

I owe

20000 to to the bank (pay 501 a month)

4000 to the credit union (pay 200 a month)

300 to a HP company (pay 50 euro a month)

8000 on a credit card (Pay 200 a month)

2000 euro to family (pay nothing at moment)

550 rent (paid monthly)

I earn 1800 a month and really cannot survive ive already missed a few payments and i am worried about my credit rating.


If I was to be accepted for VR i would get around 40000 euro , i'm thinking i should take it and clean the slate , I could try and get a new job as soon as possible but would not have to worry about taking a pay decrease etc because my outgoings would be minimal.

My mind is saying I would be mad not to go for it but a lot of me is thinking about the uncertainty around getting another job..

any advice would be appreciated.. I know I would be left with not much to play around with but im thinking a clean slate would give me more satisfaction than my current job.

Many thanks for reading
 
It depends on how easy it would be to get another job. But certainly it looks like a good option if you were able to get another job in or around the same pay, especially if there were career prospects in that job.

I know a lot of people who have done very well out of Voluntary redundancy in the last couple of years as it suited them to take it. Looks like you would get your life back by doing so.
 
Thank you for your reply going for gold

I think your right it would certainly help to get my life back or at least not have to worry about making ends meet!

I really don't have alot to play around with at the moment and its really getting to me.

I have worked in the industry i'm in for over 10 years and would happily take a lower paid position as I would still have more cash to play around with the only thing is worrying about getting a job but i'm thinking i would rather worry about getting a job and not owing anything over worrying about private number calls and banks taking me to court!

im useless with money but i think this could be my wake up call

Thanks again
 
No I don't have a mortgage or any children.. I was also worrying about if I wanted to get a mortgage but as it is i think it would be 5 years before i clear down those debts as there is nothing spare to add additionally etc a mortgage wont be coming my way anytime soon .. i'm 29 also BTW thanks for your reply
 
you wouldn't get a mortgage as things stand as you have quite a large debt and no savings. If you clear the debts and start saving a bit then you would be a candidate for a mortgage.Best of luck. Good to have options!
 
My advice is take the VR and pay of your debts in full. You are already stryggling to make repayments (you say you've missed some) and are paying 1000 p m in repayments (what's last one of 550 per month refer to?), without the 2000 to fanily being cleared, leaving you 800 p m to live on. Jobseeker's Benefit would be 196 per week but bear in mind that there may be a disqualifying period of up to 9 weeks for taking voluntary redundancy which you will have to finance for.
 
Hi Welfarite the 550 is my rent so i'm left with 300 euro a month to live on which is hard

Many thanks for your advice I think the VR might be the way to go and a clean slate would be great


I think i would have about 4000 left after paying everything which would hopefully get me through

I need to discuss with my job also to make sure im entitled I can push for it if i really want it

Thanks for your reply
 
Update your CV and get it out to agencies or other employers to help you to determine how easy it would be to get another job.
It is also a good opportunity to think about using some of the redundancy for further education or training that may help your future earnings, if that interests you.
 
Definitely clear the slate I reckon. You pay 550 a month for rent? Is that a place of your own or are you sharing? If sharing that's costly. I pay 260 a month for a room in Swords.
 
can I just ask - you say you are entitled to 40k redundancy - is this before or after tax ? My understanding is that on your 1st redundancy you can get 30k tax free with the rest subject to tax...
 
PyritePete said:
can I just ask - you say you are entitled to 40k redundancy - is this before or after tax ? My understanding is that on your 1st redundancy you can get 30k tax free with the rest subject to tax...
Click to expand...

I think you are confusing the UK system with the Irish system.

In Ireland, the statutory element of a redundancy payment is tax free. After that, the ex-gratia element (of any termination payment) is taxable except for:

the basic exemption (which is €10,160 + 765 for every FULL year of service with that employer) or
the increased exemption (which is the basic exemption + €10k - the current value of any tax free lump sum from the pension from that job) or
the amount calculated by the SCSB.

The increased exemption can only be claimed every 10 years.
 
goingforgold said:
You won't be disqualified from job seekers for any period as you're redundancy is under 50K
Click to expand...
I wasn't referring to the redundancy element; I was pointing out that there MAY be a question about leaving the job voluntarily without 'just cause' which could result in a disqualification. This from the website:

"A person may be disqualified for receiving JB for up to 9 weeks from date of leaving employment if s/he has left the employment voluntarily and without just cause."

Trying to cover all the bases!
 
shouldi said:
Hi All

I'm hoping I can get some advice if possible

At the moment i'm drowning in debt & the company I work for is offering voluntary redundancy.

I owe

20000 to to the bank (pay 501 a month)

4000 to the credit union (pay 200 a month)

300 to a HP company (pay 50 euro a month)

8000 on a credit card (Pay 200 a month)

2000 euro to family (pay nothing at moment)

550 rent (paid monthly)

I earn 1800 a month and really cannot survive ive already missed a few payments and i am worried about my credit rating.


If I was to be accepted for VR i would get around 40000 euro , i'm thinking i should take it and clean the slate , I could try and get a new job as soon as possible but would not have to worry about taking a pay decrease etc because my outgoings would be minimal.

My mind is saying I would be mad not to go for it but a lot of me is thinking about the uncertainty around getting another job..

any advice would be appreciated.. I know I would be left with not much to play around with but im thinking a clean slate would give me more satisfaction than my current job.

Many thanks for reading
Click to expand...

Take the money if you can get it otherwise you will be paying for this for the rest of your life in interest and if you miss payments it will blacken your record. Considering the way banks are going through everything forensically these days if you have any bad debts it would make it next to impossible to get credit.

Not that it's any of my business but how does a single person with no children and no mortgage get into so much debt, I'm baffled?
 
Hi there,
I was about to ask the same question as nugbug, how did you get into such debt in the first place. Is there anything else you can do to bring down the debt? Do you have a fancy car that can be sold?? I would also suggest posting on Money Makeover. I have seen cases whereby volutary redundancy was refused to people, because they were key to an organisation.

P..
 
Hi All

Thank you for your responses

believe me I know ive been extremely stupid with money & half the debt was stupidly racked up by me taking a loan out for an ex.I'm not going to whine at the end of the day but to cut a long story short hes gone and im left with it!

Its extremely embarressing for me unfortunately my lease is not up until November so I will look at options of moving then to try reduce the debt.

I think if I pushed I could get the redunancy wipe the slate clean and move on, by the looks of things were I work there are 4 people doing a 3 people job so I would have a chance.

Many thanks for your replies
 
Nige said:
I think you are confusing the UK system with the Irish system.

In Ireland, the statutory element of a redundancy payment is tax free. After that, the ex-gratia element (of any termination payment) is taxable except for:

the basic exemption (which is €10,160 + 765 for every FULL year of service with that employer) or
the increased exemption (which is the basic exemption + €10k - the current value of any tax free lump sum from the pension from that job) or
the amount calculated by the SCSB.

The increased exemption can only be claimed every 10 years.
Click to expand...

I was made redundant in Ireland in 2007. My redundancy included payment in lieu of notice which is non-taxable. Maybe that's why 30k sticks in my head...Money long since spent.

Enough about me ;) good luck to the OP. Clearing debts would always be a priority for me.
 
As I understand it, leaving your job voluntarily is not quite the same thing as accepting voluntary redunuancy which is being offered by your employer. You will also qualify for a tax rebate after a number of months.
 
The key issue is - will you get another job? How long will it take? What salary will you get?

It would be very easy to find yourself falling into debt again on the dole. How confident are you of getting another job? How many people do you know in your sector who have changed jobs in the last 6 months.
 
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