Case Studies Forced To Leave Pension

Scenario:

A Police officer forced to leave his pension scheme under pressure from creditors.
A serving Police officer with unsecured liabilities of £46,000 from credit cards, personal loans and overdrafts was under tremendous stress and pressure to pay creditors and in desperation to save money opted to leave the Police pension scheme for which he had been contributing for nearly 6 years.
He was living in rented accommodation and was without assets of any significant value. After working out his average monthly income and expenditure it became quite apparent that his disposable monthly income was insufficient to pay his creditors, even after opting-out of the pension scheme. It was highly likely that if he were to be adjudged bankrupt he would lose his job with the Police force which of course he desperately wanted to avoid.

Advice Given:

We recommended the officer to enter into an Individual Voluntary Arrangement, an ‘IVA’ which would entail monthly payments equivalent to his disposable income, allowing for his payments into the Police pension scheme over a period of 5 years. We immediately contacted his creditors advising them that the debtor was seeking professional advice in order to address his financial situation thus instantly relieving him from the constant pressure from creditors.

The Outcome:

Approximately 6 weeks after the initial consultation a meeting of creditors was held at which the officer’s proposal for an IVA was accepted. The Officer had no further contact with the creditors. His unsecured creditors are bound by the terms of the arrangement and providing he continues to make the monthly payment to the Supervisor of his arrangement, who in turn distributes funds to his creditors. At the end of the arrangement his unsecured liabilities will be deemed to have been legally discharged. It was projected that creditors would not have received any return in the event of the officer’s bankruptcy as it is likely that he would have lost his job. Effectively they will receive a return of circa 25% providing the IVA is completed in accordance with the terms and importantly, the officer has been able to resume payments into his Police pension scheme.