Why do I have to pay IP payments for 3 years?

Kaelin

Hi All

Can anyone tell me what the reasons are for having to pay an IP payments every month for 3 years when you are bankrupt? I've been told that I am classed as 'high income' - somewhat ironic given I'm bankrupt!! So have to pay installments I obviously can't afford to the IP for a 3 year period. Yet anyone who isn't classed as on 'high income' don't have to pay anything yet we all get labelled 'bankrupt' and have the same effects on our lives, credit files etc.

The IP told me this money goes towards their fees and not to the creditors - so why do I have to scrape money out of food / household allowance to pay fees towards them when other people don't have to pay? It seems a totally bizarre and really unfair system. So I'm paying for fees for everyone?! Yet can't afford a pancake! Surely if I have to find money to pay anyone it should be the creditors who get it?

I'm really confused, any help much appreciated. The IP goes as far as to explain it's 'just because of your income' - er, but I'm bankrupt....:(

dojoman

You will only be given an IPA if you have enough surplus cash left over after paying your essential bills. They always last for 36 months,.

curly04

Dont sign the paper work they send you but ask them to provide you with a breakdown of how they got to this figure

if you earn 500 or 5000 per month if you have a surplus you hvae to pay an IPA so its not because you are a high earner
why dont you post your SOA up here so we can take a look at it for you

Cheers

Curls

skylight

An IPA is part of bankruptcy. Individual Payment Agreement. If you don't agree to their figures, then don't. Question it.

It's to stop people with large incomes going BR and getting a great lifestyle out of it. Being BR means we all have to give. Emotionally as well as financially in some cases. Some people lose everything and some of us don't. It's all based on individual circumstances governed by BR guidelines.

The IPA is worked out as a percentage of your surplus after all outgoings. If you feel that they haven't allowed for some of your genuine and allowable expenses then query it. (I assume you haven't signed one yet though??)

dojoman

Are you BR already, and if so did you get any advice from the debt charities?

https://www.nationaldebtline.co.uk/
https://www.citizensadvice.org.uk/
https://www.cccs.co.uk/

Kaelin

Ok thanks, they did an income and expenditure assessment so they allow the 'government guidelines' for expenses like £12 for haircuts, £10 for clothing, £4 for prescriptions, no food for my dog etc. Just frustrates me that the IP get it and not the creditors

curly04

same here - mine has stopped due to huge change of circumstances but the way I looked at it was - at least Im debt free and paying less than I was before

do post your soa could be worth us taking a look

dojoman

By IP are you referring to the OR?

skylight

The IP doesn't get it all. Its true that their fees are deducted first and whats left that collected from you over the years will be split pro-rata for your creditors. If there is any left of course.

Don't beat yourself up over where the money goes. It's one of those things you cannot change so try not to worry about it.

Kaelin

Thank you, I will do, I have it at home so will do it tonight. I spoke to Citizens Advice and the National Debtline and they put me to the IP who put me into a Trust Deed and it failed - Northern Rock and Barclays teamed up to get it rejected So now I have to go bankrupt. I posted another question on a different thread wondering why they would have rejected it and now understand they get tax benefits from making me bankrupt so they have their reasons it seems. Which is why I got totally confused about the 3 year payment thing because the IP told me NR would still get some payment from a TD yet not from bankruptcy which is why I couldn't understand why they rejected it. Hey ho Thanks for your replies anyway everyone

curly04

Oh hun
stop worrying you might not even get an IPA
put the stuff up when you get home and we will take a look, nothing can be done till you go BR and they have to allow you to live and fee your doggies