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WinniethePooh
Starting Member
2 Posts |
 Posted - 10 June 2011 : 12:36:48
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My outstanding debts are £40,000 (credit cards, loan), and I pay about £870 a month to repay them on minimum amounts. I rent a flat at £700 a week, Council Tax £190. My take home pay is about £1,800 (£300 of which goes on travel to work rail fares currently).
At 51, I'm able to take early retirement as the Government wants to reduce civil service staff in my and other Departments by 30%.
My partner of 25 years is on about £1,300 a month. With my debts we can barely survive and of course on a retirement pension (about £775 a month), this will be far far more difficult still.
The compensation payment for taking early retirement would be used to buy out the actuarial reduction for taking my pension early, so would not be available to my creditors. Nor would the lump sum (£25,000) if I decide to "inverse commute" it to additional pension.
Is bankruptcy upon (early) retirement in these circumstances a viable option? |
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Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 10 June 2011 : 16:04:10
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Hi and welcome to the forum. I love your username!
As your situation isn't straight forward I would suggest speaking to an expert. You can find the contact details of the experts who post on here in the experts' section at the side of the page.
View my blog at http://skippy13.blogs.iva.co.uk/
Only when the last tree has died, the last river has been poisoned and the last fish has been caught will we realise that we cannot eat money.
Last IPA payment made on 28th June 2010 - it's over at last! |
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debtinfo
forum expert
2826 Posts |
Posted - 10 June 2011 : 18:00:52
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| This is an interesing one, OP, do you have the choice of early retirement or redundancy, Does the lump sum HAVE to be put into the pension pot so that you can draw early or do you have the choice to take the cash and not receive the pension (or receive a reduced pension) until pension age |
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WinniethePooh
Starting Member
2 Posts |
Posted - 16 June 2011 : 23:45:05
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quote:
Originally posted by debtinfo
This is an interesing one, OP, do you have the choice of early retirement or redundancy, Does the lump sum HAVE to be put into the pension pot so that you can draw early or do you have the choice to take the cash and not receive the pension (or receive a reduced pension) until pension age
I would have the choice of accepting a redundancy payment OR an early unreduced pension. But if I chose the redundancy payment, no pension to live off for the next eight years; so what effective choice is that really and truly? |
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Alina Pietrzyk
Starting Member
20 Posts |
Posted - 23 June 2011 : 13:28:22
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quote:
Originally posted by debtinfo
This is an interesing one, OP, do you have the choice of early retirement or redundancy, Does the lump sum HAVE to be put into the pension pot so that you can draw early or do you have the choice to take the cash and not receive the pension (or receive a reduced pension) until pension age
So debtinfo you are suggesting letting the creditors grab the redundancy payment and leae the OP with a reduced pension? Nice. Why encourage someone to make such a choice? |
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Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 23 June 2011 : 13:49:34
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No one is encouraging WinniethePooh to do anything, only asking questions to try and find out the full circumstances.
View my blog at http://skippy13.blogs.iva.co.uk/
Only when the last tree has died, the last river has been poisoned and the last fish has been caught will we realise that we cannot eat money.
Last IPA payment made on 28th June 2010 - it's over at last! |
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Alina Pietrzyk
Starting Member
20 Posts |
Posted - 23 June 2011 : 14:14:18
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quote:
Originally posted by Traceyjr
No one is encouraging WinniethePooh to do anything, only asking questions to try and find out the full circumstances.
View my blog at http://skippy13.blogs.iva.co.uk/
Only when the last tree has died, the last river has been poisoned and the last fish has been caught will we realise that we cannot eat money.
Last IPA payment made on 28th June 2010 - it's over at last!
OK fair enough, so where is the answer? Sorry but I cannot see a response to the further information given. |
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Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 23 June 2011 : 14:26:41
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It seems that this hasn't been picked up by the experts. Really WinniethePooh would be better taking advice directly from an expert as the situation is possibly more complicated than can be answered on the forum.
View my blog at http://skippy13.blogs.iva.co.uk/
Only when the last tree has died, the last river has been poisoned and the last fish has been caught will we realise that we cannot eat money.
Last IPA payment made on 28th June 2010 - it's over at last! |
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Viki.W
forum expert
United Kingdom
2211 Posts |
Posted - 23 June 2011 : 15:19:54
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Hi WinnethePooh,
As Tracey has suggested, I also advise you speak to an expert, either at the CAB or on here.
Viki Warbrooke
Vincent Bond & Co
If you would like free advice on all options available and help with your bankruptcy petition please contact me at http://www.vincentbond.com/about_us_Viki_Warbrooke.asp
Please read my experience of debt via my blog at http://vikiw.blogs.iva.co.uk/ |
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Alina Pietrzyk
Starting Member
20 Posts |
Posted - 23 June 2011 : 17:40:35
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They can't touch your lump sum from the pension, only the redundacy compensation. But it is your choice not theirs if you take the pension unreduced instead of the compo, so if you do you will be fine.
It's not complicated this is not rocket science!
Pensions are protected by HMRC certainly in your case as a civil servant.
Why do you need expert advice? |
Edited by - Alina Pietrzyk on 23 June 2011 17:42:02 |
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Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 23 June 2011 : 18:06:23
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I would suggest that anyone thinking of going BR take advice as this is not something to be entered into lightly despite what some people think. You will also be asked if you have taken advice when you go to court.
View my blog at http://skippy13.blogs.iva.co.uk/
Only when the last tree has died, the last river has been poisoned and the last fish has been caught will we realise that we cannot eat money.
Last IPA payment made on 28th June 2010 - it's over at last! |
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debtinfo
forum expert
2826 Posts |
Posted - 23 June 2011 : 19:45:03
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Hi Alina, i would hesitate to give out such definitive advice (are you qualified)
To the OP, As i said this is an interesting one, i dont actually know the answer as it is not a situation i have come across before. This is my concern, obviously if you take the redundancy then any money available will be taken by the trustee, If you were to get a lump sup from your pension during the bankruptcy then that would be taken as well. If you put the money into the pension pot then there is no lumpsum but (and here is the not sure bit and where you need better advice than i can give you) The Trustee has a relativly rarely used power to reverse transactions if you shortly before bankruptcy pay excessive amounts into your pension to put them beyond the reach of creditors. (the OR would have to apply to court and show that they were excessive), hence why i was asking if you had the choice. I rally dont know if this circumstance would be covered by that |
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Alina Pietrzyk
Starting Member
20 Posts |
Posted - 23 June 2011 : 20:01:59
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quote:
Originally posted by debtinfo
Hi Alina, i would hesitate to give out such definitive advice (are you qualified)
To the OP, As i said this is an interesting one, i dont actually know the answer as it is not a situation i have come across before. This is my concern, obviously if you take the redundancy then any money available will be taken by the trustee, If you were to get a lump sup from your pension during the bankruptcy then that would be taken as well. If you put the money into the pension pot then there is no lumpsum but (and here is the not sure bit and where you need better advice than i can give you) The Trustee has a relativly rarely used power to reverse transactions if you shortly before bankruptcy pay excessive amounts into your pension to put them beyond the reach of creditors. (the OR would have to apply to court and show that they were excessive), hence why i was asking if you had the choice. I rally dont know if this circumstance would be covered by that
No I must admit I am not qualified, and not an expert. But if as a qualified person you say you do not have the answer, how can anybody know?
Is accepting an acturially reduced pension early instead of a compensation lump sum a question of putting money into your pension? And the lump sum from the pension being used as extra pension, from what you are saying, could be critial or dangerous for the OP, despite my inexpert advice? But you don't know if it is or not. I think we should be told! |
Edited by - Alina Pietrzyk on 23 June 2011 20:04:28 |
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debtinfo
forum expert
2826 Posts |
Posted - 23 June 2011 : 20:10:00
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Hence that is why i am raising the question that the OP may not have thought of, so that the OP can commumicate that to an other expert they speak to.
Another expert may just happen to have come accross this situation before, There are many parts of the insolvency law that are open to interpretation any many that you cannot get a definitive answer before you commit, often all you can do is make a decision yourself on the balance of probabilities |
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Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 23 June 2011 : 20:28:19
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Alina, your posts are quite aggressive, so please try and keep them within the forum etiquette guidelines.
No one can know everything about all subjects and I would rather the posters said when they were not sure of something than giving out incorrect information, especially with something as important as this.
View my blog at http://skippy13.blogs.iva.co.uk/
Only when the last tree has died, the last river has been poisoned and the last fish has been caught will we realise that we cannot eat money.
Last IPA payment made on 28th June 2010 - it's over at last! |
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Alina Pietrzyk
Starting Member
20 Posts |
Posted - 23 June 2011 : 21:12:40
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quote:
Originally posted by debtinfo
Hence that is why i am raising the question that the OP may not have thought of, so that the OP can commumicate that to an other expert they speak to.
Another expert may just happen to have come accross this situation before, There are many parts of the insolvency law that are open to interpretation any many that you cannot get a definitive answer before you commit, often all you can do is make a decision yourself on the balance of probabilities
Open to interpretation. Aha. So much for fairness for all sides!
So one bankrupt sees an OR and is told "That was unfortunate from the creditors' point of view but hey, you got the choice in the pension deal and you made a good choice for yourself", while another bankrupt is told "Now we are going to have to reverse that pension decision you took and take it as a lump sum for our creditors."
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Early retirement
