Yet another IPA query

I have looked into this on several sites, and it seems that Sniggings is indeed correct. The period of time IS 3 years, and if an agreement IS made for you to miss a couple of months or so, because you cannot afford it for that particular period of time, as long as the non-payment has been agreed with the OR; you will NOT have to 'still pay the full 36 payments' and 'have it added on after the 3 years' as has been said on here.

So if you start your IPA in January 2013, and you miss out October and November 2013, after agreeing it with the OR, your IPA will still end in January 2016, and will not carry on until March 2016, to ensure it is still '36 payments' received. The IPA period is 3 years, and if you make only 33 payments in that period, it does not matter, as long as the OR has agreed to the missing payments,

I found this info out on the internet quite easily, but actually knew it already. I just looked up a link to back it up.

http://webarchive.nationalarchives.gov.uk/+/http://www.insolvency.gov.uk/freedomofinformation/technical/incomepaymentordersagreements.htm#2

Click on number 2: How long does an IPA/IPO last? and pay particular attention to the paragraph that reads:


What happens if I miss a payment under my IPA or IPO? And particularly the last line (bolded)

It says...

"If you miss a payment, your trustee will ask you for an explanation and, where possible, arrange for you to pay the arrears over a short time. If the problem is more long term, such as a drop in your income or a necessary increase in your spending, the trustee will look at the situation again. If your trustee is satisfied that an IPA or IPO is no longer appropriate (for example because you have lost your job or your income has dropped) your trustee will tell you that payments will be suspended or reduced until the situation improves. If this happens, you must tell your trustee if things improve before the term of the IPA or IPO ends. If you can at any time restart the payments or increase them, the IPA or IPO will continue from that point. However, the agreement or order will end on the originally agreed date."


If you do not make payments and do not tell the OR, then of course that is a different matter, and you can get into trouble of course, and the Courts will probably chase you for the money, unless you have a damn good reason for not paying. But yes, if you have agreed with the OR to miss out several months because of a lower income or essential outgoings you were not expecting, they will not add those months on at the end of the 3 years.

It's also on this link from the Insolvency Service

http://www.bis.gov.uk/insolvency/personal-insolvency/income-payments-orders-and-agreements#3

So yes, what Sniggings has said IS correct.

coolcait wrote: »

Glad the OP's problem was sorted out.

The IPA discussion is interesting. In language terms alone, there is a difference between 'vary' and 'suspend'.

In practical terms, there is a difference between being unable to make a payment because your income has decreased/regular outgoings have increased, and being unable to pay it because you have had a one-off, unexpected, unbudgeted expense.

In real-life terms, there are nuances and pragmatism. That can mean the difference between an OR/Trustee saying:

"You've got a big repair bill this month, and you can't afford to pay it AND your IPA? Well, you'll have to pay for the repairs once you've saved it up - that's not grounds for suspending/reducing or varying your IPA. And if you don't pay your IPA, I may apply to the court for an order suspending your discharge from bankruptcy AND I can take steps to recover the money you owe"

or

"OK, I can't change the IPA to let you pay for the repairs, and I can't say that you're OK to miss this month's payments. But, if you can agree to make up the missed payment during the course of your IPA, or pay it at the end, we can probably sort it out".

Despite all the posturing on the thread, the fact is that you're probably all correct to one extent or another.

The OR probably could insist that all payments are made on time, and that any unexpected repair bills are the bankrupt person's own problem - and this way all payments would be made within the three year period. And any failure to pay could lead to the consequences already mentioned.

Alternatively, the OR could take a more pragmatic and sympathetic approach, and agree that the person could pay the arrears over a short time - even if that was a couple of months after the three year period.

Anecdotal evidence from this board, and others, suggests that the OR will take the alternative, pragmatic and sympathetic approach.

Personally, I prefer that approach. And I think that it would be a great shame if it were to be lost.

a late payment, needs to be paid back, a suspended or reduced IPA does not.

if your OR says it's ok to be late with your payments then of course you still owe that money and need to make the payments up at a later time, we were not taking about late payments though were we!

Thank you coolcait, you were saying exactly what I was saying too, and I too was always talking about missed payments due to expenditure and I too have seen many cases on this board where the OR has indeed excepted those missed payments after the IPA has ended, so the BR person has continued to pay the monthly installments beyond 36 months of the start of the IPA.

Lou67's quote is pretty much exactly what DI said.

I don't understand the argument here?


As has been mentioned by DI, on application to the OR, a BR, [faced with a sudden expense] can ask for a 'payment holiday'...a suspension.


If the OR decides said expense comes at a time within the IPA period, that the BR could not have reasonably saved for it from the allowances, then the IPA can be suspended to alleviate cash-flow...but is resumed for the remaining period.

If.. the OR decides that the expense should have already been allowed for on the SOA,[ but wasn't] they can vary/reduce the IPA payments for the remaining period. [i.e..... agrees a revised SOA, reducing any surplus]

In the former case, the payments period is for 36 months.
[BR can afford it from allowances, but not at that moment in time]

In the latter case, the payment period ceases at 36 months from inception.
[BR could never afford it given the existing levels of allowances]


I , personally, went through something similar., regarding payment periods.

I had a NT IPA.

My tax code was changed come the new tax year.

However, due to overtime payments, Moonbeever had yet to calculate the additional sums I still needed to pay.

So, I was still paying my NT IPA three months after the new tax year....3 months after my tax code had changed.

[But, only the surplus I 'owed' from Jan, Feb & March]