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

Kaelin

Sorry dojoman, IP meaning Insolvency Practitioner (I think it's different in England? Guess that's OR?) Yeah they are one that National Debtline put me to

Kaelin

Many thanks Curly04, will do. The IP said that the same payments would apply in bankruptcy as it would in the TD so would just be one year shorter as bankruptcy payments just for 3 years (they proposed a 4 year TD). NR put an inhibition on my house which means they get the unsecured part of the together mortgage back should I ever sell so maybe this works out better for them in bankruptcy? There's no equity in it (they did a survey) so I've been told they can't touch it?

Kaelin

Here's my sad SOA This is the expenditure the IP worked out for me based on the government guidelines and so only includes essentials that I must pay and doesn't include any of my debt (which stands at 29k)

- Mortgage £540
- Mortgage arrears £100
- Council tax £78
- Electricity £90
- Mobile phone £35
- Buildings and contents insurance £12
- Car HP £201
- Car insurance £35
- Petrol / diesel £130
- Road tax £10
- MOT / repairs £25
- TV Licence £12
- Prescriptions £4
- Dental / opticians £16
- TV / internet £20
- Food / household £200
- Clothing / footwear £25
- Hairdresser £12
- Miscellaneous £20

So income at £1750 minus these leaves £185 towards the IP for 3 years. So every penny of the what is classed as 'excess' goes to the IP, when in reality it's clearly not excess

Any help much appreciated

onward

I'm afraid I can't help with much, but where are your water rates? Surely these should be listed too.

ontheroad_2

kaelin in bankruptcy the figures are a bit more generous than for an IVA, and if you have a surplus, its only a percentage of the surplus which is used for your monthly IPA. So lets say you do have a surplus of £180 per month, only 50% of this would be your IPA figure = £90.

IVA is different from bankruptcy, as far as the figures used per government guidelines, and what happens to any surplus. If your IP is telling you different, might that suggest they want you not to go bankrupt? This would mean of course that your creditors would get next to nothing from you or your surplus, and your IP would be out of a job as far as your case was concerned .

out_of_cash

if the ipa payments go towards the IPs fees then how much are these likely to be,? as i asked this question a few times before and was given the impression the fees would normaly be around 3k unless there was a complicated assett to sort out.

Kaelin wrote: »

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....:(

dancingfairy

Kaelin - it might help if you posted what your family was - ie 2 adults, 2 children etc so we get an idea of whether the figures are reasonable or not.
Where are you as you are not in England as the rules might be different? I think there a few people on here who have experiences of bankruptcy/insolvency outside of England.
df

broxiebear1

ontheroad wrote: »

kaelin in bankruptcy the figures are a bit more generous than for an IVA, and if you have a surplus, its only a percentage of the surplus which is used for your monthly IPA. So lets say you do have a surplus of £180 per month, only 50% of this would be your IPA figure = £90.

IVA is different from bankruptcy, as far as the figures used per government guidelines, and what happens to any surplus. If your IP is telling you different, might that suggest they want you not to go bankrupt? This would mean of course that your creditors would get next to nothing from you or your surplus, and your IP would be out of a job as far as your case was concerned .

i think op is in scotland and i have heard that or takes more than english or someone that has went through br in scotland not lila please confirm

bat-out-of-hell

out_of_cash wrote: »

if the ipa payments go towards the IPs fees then how much are these likely to be,? as i asked this question a few times before and was given the impression the fees would normaly be around 3k unless there was a complicated assett to sort out.

Dont know about the IP North of the boarder, but the OR's fees start at around £1800 for a 'basic case', but bear in mind they get no more than the deposit if there is nothing to liquidate in the the BR's estate, of the two posters that i know got a copy of the 'bill', one was around £2500, the other just over £3000.

So a £50 IPA is of no benefit to your creditors, even in a simple case, and have often wondered how much of it goes to moonbeaver for there 'fee' to collect it :think:.

Kaelin

Thanks everyone.

onward - I'm in Scotland so the water rates are included in council tax.

ontheroad - I don't totally understand what you mean about the IP not wanting me bankrupt? They told me it's really my only option left. And they said that I would have to pay the same £185 a month as was worked out for the Trust Deed but it would go solely to pay for the administration of the bankruptcy and none of it would go to the creditors. That's why I was surprised that Northern Rock rejected the Trust Deed as if they get money from that and none in bankruptcy it makes no sense. Though I've since learned that they get tax back on me being a bankrupt customer

out of cash - the fees that were worked out in the TD which I assume are to be the same in bankruptcy are £6181. This is made up of Trustee's fees at 6k, VAT at £700, Third Party Fees (Payplan) £881 (yeah - Payplan nicely never mentioned they charge fees), Estimated Outlays £350 and Accountant in Bankruptcy fee £250. I guess they apply the very same fees to bankruptcy? That's why I'm going to speak to a money advisor before I sign the bankruptcy documents with this IP, incase these are high or if it would be the same with any other IP.

dancing fairy - I'm in Scotland, live on my own with no kids and have a dog

Given what everyone has said, I think the rules in Scotland must be really different and that you have to pay the full difference between allowed income and expenditure to the IP