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Max Lowry
Max Lowry, Advocate
Category: Bankruptcy Law
Satisfied Customers: 1457
Experience:  LLB, 10 years post qualification experience
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Max, my bankruptcy ends mid July. I am at risk of being

Resolved Question:

Hi Max, my bankruptcy ends mid July. I am at risk of being made redundant or being offered a compromise agreement from my employee. If this is offered is there risk the OR can it?
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  Max Lowry replied 2 years ago.
Hi, welcome to the site. My name is ***** ***** I will help you with your question. In short, if your are made redundant before discharge any money you receive will be classed as an after acquired asset and will go the official receiver. If your last day of employment is after discharge any money you get belongs to you not the OR.
I hope this helps.
Customer: replied 2 years ago.

So firstly who declares the payment? Secondly, how do they take your living costs into consideration. This money would need to be used to continue to pay bills etc.

Expert:  Max Lowry replied 2 years ago.
You have a duty as a bankrupt to give full honest information to your trustee in bankrupty.
A redundancy payment is not classed as income. It represents compensation for the loss of employment. I'm afraid it is not considered as compensation for loss of earnings.
Customer: replied 2 years ago.

Okay makes sense. Appreciate my obligation. So I would have to claim benefits as I would have no access to any of these funds.

Expert:  Max Lowry replied 2 years ago.
I'm afraid you would until you gain other employment. I know the system doesn't sound right.
I hope this helps.
Customer: replied 2 years ago.

Sorry Max, would a compromise agreement be treated the same as a redundancy payment. My HR Manager says not as it states payment due to loss of earnings.

Expert:  Max Lowry replied 2 years ago.
Hiya, let me check the position on this. I will shortly come back to you.
Thanks for your patience.
Expert:  Max Lowry replied 2 years ago.
Thanks for waiting.
I have now checked the position. The situation, I'm afraid is exactly the same as if you were to receive redundancy.
The compromise agreement award would be treated as an after acquired asset in the bankruptcy and the official receiver will be entitled to it.
Customer: replied 2 years ago.

Hi Max, The company may now give me a three month notice as per my contract. I am obliged to work it. If they decide to simply pay me for the three months rather than working this, would this still need to be declared. In other words they are giving me notice. I would have give three months if I was to leave.

Expert:  Max Lowry replied 2 years ago.
Hiya, I would say that notice money is yours. You would've earn it in any event despite you receiving it as a lump sum. You will need it to live on and pay your day to day living expenses. You probably do not need to declare it as it is classed as income. If however you have a surplus of money left over from this then the OR an ask for this to be paid to your creditors. If you can show you need all the money for your reasonable expenses then the OR will not touch it.
I hope this helps.
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