undischarged vs discharged bankrupt

bissous

I've had good news from my OR who will start an early discharge process on 13 May, although I was made BR only on 5 January 2009.

So, given it takes 8 weeks to complete the process if there are no further issues (and there are none I can think of), I will be a discharged bankrupt in mid July, only 7 1/2 months after I was made BR.

This might be a naive question but what is the difference between being an undischarged and a dischrged bankrupt? There must be more than being allowed to take on directorial positions and to promote a company once the discharge has been completed.

Who knows more?

Thanks,
Bissous

Fandango2090

Doesn't it mean that you don't have to tell the OR of any changes of you incomings/outgoings, so that all the money you earn is yours? Also, I believe you can then start to apply for credit over £500 again without having to explicitly inform your creditors that you are b/r. I'm sure there's other things as well!

Congrats

fatou256

good news for you but beware geting ED is not a guarantee ( i don't want to give you bad luck or fales hope).
i was told the same in November 2008 , then in february 2009 and then last month by my OR .. i am still undisharged and still waiting for my ED . i have filled many IPOQ .

When you get discharged you are no longer liable to any of your debt and to the BR restriction and to your OR. you are free to do whatever you want. While you are undischargred you have restriction, comply with any of the Or request and so forth.

blind-as-a-bat_2

Fandango2090 wrote: »

Doesn't it mean that you don't have to tell the OR of any changes of you incomings/outgoings, so that all the money you earn is yours?

Only if no IPA is in place;) the OP didnt say, may have said elswhere, but just thought it best to clarify

bissous

Fandango2090 wrote: »

Doesn't it mean that you don't have to tell the OR of any changes of you incomings/outgoings, so that all the money you earn is yours?

I am not sure that this is the case. I have always thought that any BR will be paying off 70% of his/her surplus income to the creditors over a period of 3 years.

That applies to all BRs, regardless of being an undischarged or discharged.

Can anybody confirm?

Thanks,
Bissous

skylight

bissous wrote: »

I am not sure that this is the case. I have always thought that any BR will be paying off 70% of his/her surplus income to the creditors over a period of 3 years.

That applies to all BRs, regardless of being an undischarged or discharged.

Can anybody confirm?

Thanks,
Bissous

Not necessarily. The starting and most common rate is 50% of any surplus. Of course, if there is no surplus then there is nothing to pay. And if an IPA (the payment agreement) is not set up before discharge then one can never be implemented regardless of your earnings thereafter.

And an IPA is not payable to creditors either. Its paid to the OR who will deduct their fees first and then pro-rata the remaining amount to creditors. Sometimes the IPA only covers the ORs fees and everyone else gets nothing.

Plus, an IPA is flexible. So if you pay an IPA for 12 months, lose your job for the next 12 months so you pay nothing, then get a job again for 12 months, then you have paid 24 months worth but your 36 months of "time" are up.

If you are paying an IPA, you are legally bound to inform the OR of any changes to your income within the 36 month period - regardless of whether they go up or down.

bissous

Well I just found this on the Insolvency Service website about payments beyond discharge and IPAs:

"What is happening with Income Payments Orders (IPO) and Income Payments Agreements (IPA)?

The IPO regime is designed to ensure bankrupts make an affordable contribution towards their debt. Generally they last for just under 3 years, and in most cases prior to the introduction of The Enterprise Act they ceased on discharge from bankruptcy.

The Enterprise Act sets out that generally IPOs will in future last for 3 years from the date of the IPO. IPOs are made by the courts on the application of the trustee in bankruptcy and generally they are not contested. IPOs can be varied if the trustee or the bankrupt applies to the court
.
IPAs establish a legally binding written agreement between the bankrupt and the Official Receiver or trustee. An IPA requires the bankrupt (or a third party) to make specified payments to his trustee for a specified period. This will be enforceable in the same way as an IPO made by the court. An IPA must specify the period in which it is to have effect and that period can apply after a bankrupt is discharged but cannot extend to a date more than 3 years after the date of the IPA. An IPA may be varied in writing."

I can't recall ever having signed an IPA with my OR or does that come into place automatically as part of the procedure ??

cuddlymarm

Hi

OH was discharged last month but we will still be paying to the OR for another 2 1/2 years (It took them a while to start taking anything from us)

My understanding of it is that if they discharge you without setting a payment then you won't have to pay anything. But they can put it in writing that if you come into money / get a better job etc they might come back to you for money within the 3 year period.

fermi

An IPA/O can only be put in place before you are discharged.

If you are discharged and one has not been put in place, then that is it. You will not get one and will not have to pay anything.

fermi

cuddlymarm wrote: »

But they can put it in writing that if you come into money / get a better job etc they might come back to you for money within the 3 year period.

If they don't have an IPA in place before you are discharged, even that is not possible.

cuddlymarm

Hi Fermi

Thats what I meant. If they are going to come after you for money they have to say so before they discharge you.