Ipa/ipo - Help!!!

1bigmess

Hi all,

quick query re IPA's please.

I went BR 16/09/08 after a failed Ltd company. At the time of BR i was unemployed and receiving jobseekers allowance. I finally got a job after 3 months and started in November. I informed OR who said he would send me I+E form mid january to asses whether or not I will have to make any payments.

My problem is this - due to low taxable income this year, my take home pay is currently £130 pm more than it will be in April. Also, as employment started half way through financial year, my joint claim for tax credits with my wife is quite high. come April this will reduce by almost £300 pm. So there would be a £430 pm difference between filling out the forms in January and April. I know that come April my surp income will be below £99 so I will not make any payments, but if the OR starts an IPA on the basis of Jans income, I am then liable to pay any money I come into in the next three years. This is causing an elderly relative of mine some concern.

Will the OR accept the fact that Jans figures are not a true refelction of what my income will be be and allow me to use what I know Aprils figures will be if I explain why??

Bit long winded and maybe sounds selfish re reference to possible inheritence, but it is genuinely the relative who is concerened, not me. I'd like to think they'll still be here in 3 years time!!!!!

Many thanks

deedee_3

You have to fill it in as it is at the time you are sent the SOA form. If it changes again then you ask for another form and fill it in with the revised figures. Sorry if this is not what you wanted to hear. Why is it causeing a reletive problems?

Edited to say when you get your form pop your SOA up here for the chaps to check it over as things will have changed since you went bankrupt.

1bigmess

Thanks for the reply.

It's my grandad that is worried. He's 85 and him and my nan (who died nine years ago) have always said what they intended to leave the grand kids. It's by no means a fortune, but as soon as I went BR his only concern was that if anything happened to him, his money would be taken if left to me. It makes him slightly angry thinking that he worked for 50 odd years and that if he tried to give me anything, it would be taken. The amount left is really negliable, but it is the principle that bothers him - tried explaining that I went BR owing 50k and they want some money back but he doesn't see it like that!!!

Can I be creative with my SOA? Are there set amounts that can be claimed for groceries etc or do you have to provide receipts/bank statements as proof as what is spent?

deedee_3

There is no 'set' amounts but there are numbers that won't ring alarm bells with the OR. Just pop up your SOA and the chaps will check what will be acceptable. The OR won't want to see recipts unless any figures are too high.

http://www.makesenseofcards.com/soacalc.html

There is a way that the will can be worded so that you won't get the money and can have it later I am sure. Fermi, Blind-as-a-bat or Richard_s will be able to advise on that I am sure if you PM them.

1bigmess

thanks deedee

Dolly-Rocket

Also, have a look at this.
http://www.insolvency.gov.uk/DocumentLibrary/Policy/Excel/Household Expenditur.xls

deedee_3

Use this with caution as it is a little out of date, but will give some idea.

deedee_3

bumping for BAAB

blind-as-a-bat_2

as far as inheritance is concerned the OR will take it if it within the BR period, but i think they can only take it if it would be used as an income during the remainder of the IPA after AD or words to that effect, will have to check to be sure, or see if fermi beats me too it as usual:p


edit- this confirms the first bit

31.8.2 Definition of property for section 307

Generally under the Insolvency Act 1986 "property" includes money, goods, things in action and land. The official receiver as trustee may not claim as after-acquired property any items which, if they had been acquired prior to the bankruptcy order, would not have been part of the bankrupt’s estate. However, where items detailed in section 283(2), acquired between the date of the bankruptcy order and the date of discharge, are considered to be of excess value, the trustee may claim them if a reasonable replacement is provided. Full details of the terms used in section 283(2) are given in chapter 8 (part 8 - Exempt property). Reference should be made to paragraph 31.8.11 for full details of claiming exempt property considered to be of excess value. Departmental lawyers advise that a claim to exempt after-acquired property of excess value should be made under section 308 and not under section 307. However, as the Act is not entirely clear on the way in which a claim should be made, where the official receiver is considering claiming such property he may wish to consult with Technical Section on the claim without delay. Where part of a bankrupt’s income can be claimed under an income payments order (see chapter 31.7), such income is not property that may be claimed by the trustee as after acquired property. Whenever the official receiver is uncertain whether particular property may be claimed by the trustee he should consult Technical Section without delay because of the time limit in which property may be claimed (see paragraph 31.8.8).

Notes:[s436][s283(2) and (3)][s308][s307(5)]



31.8.3 Examples of after-acquired property

Examples of some after-acquired property are as follows:-

If an award is made to the bankrupt under the Criminal Injuries Compensation Scheme, it may not be claimed where it relates to bodily injury to the bankrupt. The position where part of the award is in respect of loss of earnings is uncertain. It may be possible for the trustee to claim that part of the award which relates to past earnings, including those up to the date of the bankrupt’s discharge. However, advice should be sought from Technical Section in such cases. If the award has been used to purchase an asset, the trustee should deal with that property in the same way as for damages for personal injury (see (4) below). A right to or expectation of an award is not "property" within the meaning of the Act and does not vest in the trustee.
If there is a build up of funds in the bankrupt’s bank or building society account, the official receiver should consider claiming monies that are in excess of those necessary to satisfy the basic domestic needs of the bankrupt and his family. If the accumulation is due to there being an excess of disposable income, consideration should be given to applying for an income payments order.
Any redundancy payment or payment in lieu of notice should not be treated as income but may be claimed as after-acquired property. However, the official receiver, as trustee, should be satisfied, by contacting the bankrupt’s former employer if necessary, that the amount claimed as after-acquired property does not include any amount payable in respect of wages (which must be regarded as being income).
Any rights of action which relate to the bodily or mental suffering of a bankrupt, or from injury to his person or reputation, will remain vested in him. Reference should be made to chapter 31.9 (particularly part 3) for further guidance and for details of the circumstances when the funds awarded following a successful action may be claimed.
Some pensions benefits do not vest in the trustee (see chapter 61, particularly part 2 for further details.) Those pensions benefits which are excluded from the bankrupt’s estate by statute will not be claimable by the trustee where payment is made, or due to be made, to the bankrupt between the date of the bankruptcy order and the date of discharge although pension payments may be considered as income in an assessment for an income payments order. (See chapter 61 for further details of this.)
An interest under a will may be claimed where it devolves upon the bankrupt prior to his discharge, as a result of the death of the testator. However, the trustee will not be able to do so where the bankrupt’s interest arises under a protective trust. A protective trust is usually created in relation to a freehold or leasehold property. It gives the person in whose favour it is made an interest, usually for life, although it may be for a shorter period, enabling them to live in the property for example, without having a right of sale over it. It may be necessary to seek legal advice to determine whether such a trust has been established. Tax refunds may be payable to a bankrupt which relate to periods before and after the bankruptcy order. Where the refund is in respect of the period from the date of the bankruptcy order to the following 5 April, it should be claimed using the bankrupt’s duly completed authority. Where the repayment is in respect of tax years subsequent to that in which the bankruptcy order was made and becomes payable prior to the bankrupt’s discharge, it should be claimed by means of an income payments order. Full details of dealing with a lump sum to be paid to the bankrupt as a tax refund are given in chapter 31.5 (Monetary assets).

fermi wrote: »

Hi.

This is my understanding of the situation (but I am not a lawyer).

Your post suggests that he is paying an IPA that ends 06/09. Since these last 3 years that implies that he was made bankrupt during (or before) 06/2006, and so would have been discharged at the latest by June last year.

Whether the OR/Trustee has an interest in the money/assets depends upon whether it 'devolves' upon the bankrupt while they are 'undischarged'. For an inheritance this is date that the person leaving the money assets died not when the money is received.

So if their relative passed away before the bankruptcy was discharged then the OR will be able to claim some of the inheritance (and must be informed), and if not they can't.

The small exception to this is any income that may derive from the capital (interest or return on investment etc.) or if the capital is used to replace a previous regular income. In those circumstances the OR would still not be able to touch the capital if it devolved on the bankrupt after discharge, but they would be able to claim a portion of the resulting income under the existing IPA. And under the IPA, the OR must be informed of any increase in income within 21 days.

.

That explains the replaceing income bit better, cant find the bit fermi got it from, but thats the gist of it