state benefits and bankrupsty

peachyprice

Your benefits are what the government deem the minimum necessary for you to live, and what you need to make your children's life comfortable.

If you used them to pay an IPA during bankruptcy you would be depriving them of what they are entitled to.

And TBH, there really isn't such thing as too much surplus for bankruptcy. As long as your debts outweigh your income you are insolvent, and BR is a viable option.

fermi

The OR can ask you to make a voluntary IPA contribution if you have a surplus that comes from benefits, but they CANNOT force you to make payments.

caz33

crazy_blonde wrote: »

Hello, I also recieve Income support, Carers allowance (I care for my dad), and Child tax credit and Child Benefit (for one child) as my only income (but no disability allowance). My OR said that said that because state benefit made up my entire income it would be innapropriate to touch it (not that I had enough surplus anyway), as a result he was'nt intersted in my outgoings at all and we skipped that section of the SOA. I don't know if this is at the discretion of the OR or a general rule. I think its most likely down to the OR and the fact that my debts are old and I have not used credit for 3-4 years may have had a bearing on his dicision as he was'nt particuarly interested in them either (we skipped that part of the form also). My debts totalled about £17000, I had no assets and was not given an IPA. I agree with izools, you should establish any extra expence their disability costs you and put in in your SOA. Hopefully your OR will also feel it is innapropriate to touch your benefits but its probably best to cover all bases.

i think your right it partly comes down to the OR.most off my debts have been 4years that weve just been paying the interest off.il get a letter like izools suggested.what a nightmare!thanku

peachyprice

This if from the Insolvency Service manual:

Whilst an IPA should not be sought where the bankrupt's only source of income is state benefit [note 3], the official receiver should not automatically discount the possibility of obtaining a contribution from a bankrupt who has surplus income but is also in receipt of benefit. Any calculation to identify surplus income should include all available income, including state benefits, paid to an individual for the general benefit of that individual and their family. This includes child tax credit, which is also a state benefit and comprises part of the income available to the bankrupt and his/her family, against which an IPA can be calculated. The person making the income and expenditure calculation (usually the examiner) should initially ascertain whether the bankrupt is also in receipt of non-benefit income. If this is the case, an IPA should be considered, the total income should be established (see other income sources at paragraph 31.7.7) and the bankrupt's reasonable expenses deducted (see paragraph 31.7.19) to cover his/her reasonable domestic needs. An assessment can then be made as to whether the bankrupt is in receipt of surplus income. If an IPA is to be sought, any surplus should be less than or equal to income from the source other than benefits. It should be remembered that whilst the bankrupt's total income (including state benefits) should be included in the calculation of surplus income, it is the income from sources other than the benefit(s) which is providing the payments under the IPA/IPO, which is why an IPA should only be sought to the extent of the non benefit income.
The only exception to the inclusion of state benefits in an income payments calculation is where a bankrupt is in receipt of child benefit, which is not an income based benefit (unlike child tax credit, see above). The High Court has stated as a matter of public policy that child benefit should not be included in the statement of income when applying for an IPO and there is no reason why the same principle should not be extended to cover IPAs.
Where a bankrupt’s income solely comprises state benefits, it is unlikely that a surplus will arise except where they are in receipt of non-means tested benefits, for example Disability Living Allowance. The official receiver should consider that it is always open to the bankrupt who has a surplus and wishes to contribute, to make voluntary payments. If the bankrupt was minded to contribute on a voluntary basis, having been informed that their income appeared to be sufficient to produce a surplus taking in to account their reasonable domestic needs, a voluntary agreement could be incorporated into an IPA, but it would have to be clearly noted that no enforcement action would be taken if the bankrupt failed to make agreed voluntary payments.

So the long and the short of it is they cannot make you pay an IPA, although you are free to do so voluntarily.

Those are the rules, regardless of the OR.

Hope this helps.

caz33

peachyprice wrote: »

Your benefits are what the government deem the minimum necessary for you to live, and what you need to make your children's life comfortable.

If you used them to pay an IPA during bankruptcy you would be depriving them of what they are entitled to.

And TBH, there really isn't such thing as too much surplus for bankruptcy. As long as your debts outweigh your income you are insolvent, and BR is a viable option.

ok thankyou just been swirling round and round in my head thats what i thought but then CAB reallly confused me for ie as soon as my daughter was awarded dla i told them and they wacked it on the surplus.last thing is (sorry to b a pain) i didnt know if to pay someone to do the forms,is that needed?when i spoke to a company they were sure they could help and where im so stressed mayb easier.dont want to go back to CAB especially as they think i should not go BR.

skylight

NO!!!

NEVER PAY ANYONE ANYTHING RELATED TO DEBTS LIKE FORM FILLING. ITS A WASTE OF MONEY.


I cannot shout that loud enough - DO NOT pay anyone. You have debts, no assets and no income (earned). Your forms will be relatively straight forward. Do not waste your money.

The CAB are an ADVISORY service. They can only advise. That does not mean that they are right nor do you have to agree with them.

caz33

peachyprice wrote: »

this if from the insolvency service manual:



So the long and the short of it is they cannot make you pay an ipa, although you are free to do so voluntarily.

Those are the rules, regardless of the or.

Hope this helps.

ok thanku!

debt_doctor

peachyprice wrote: »

If you do a DMP your benefits will be seen as income, which is how CAB got to a surplus of £430

....not if I'd have been calculating it they wouldn't !!;):D

DD

caz33

skylight wrote: »

NO!!!

NEVER PAY ANYONE ANYTHING RELATED TO DEBTS LIKE FORM FILLING. ITS A WASTE OF MONEY.


I cannot shout that loud enough - DO NOT pay anyone. You have debts, no assets and no income (earned). Your forms will be relatively straight forward. Do not waste your money.

The CAB are an ADVISORY service. They can only advise. That does not mean that they are right nor do you have to agree with them.

AH OK!! i asked a debt place a question and now there as bad as the creditors always ringing,just thought they may no better than me what to write.i wont do that then :)thanku

fermi

debt_doctor wrote: »

peachyprice wrote: »

If you do a DMP your benefits will be seen as income, which is how CAB got to a surplus of £430

....not if I'd have been calculating it they wouldn't !!;):D

DD

There we go. Direct from a CAB debt advisor we know you can trust.