The Bankruptcy Club & Supporters Club

tight_jock

installspark wrote:

It has been known for an OR to make an IPA where the income source is made up of benefits.

To quote from the technical manual can be misleading as this is currently out of date and is subject to TO's which are not made available in the public domain.

Please bear this in mind, especially as the technical manual is open to varying degrees of interpretation by OR's and IP's and should be referred to for guidance only.

I will second this. Our CAB advisor spent time with one of the top OR guys in London who told her that virtually nothing is set in stone as there is so much leeway for individual discretionary decisions. The technical manual guidelines are precisely that GUIDELINES.

I would also say that whilst there are a few of us who can advise on specific Q`s , there is no substitute for expert advice BUT that needs to be gained through the relevant agencies and is available for free. Our advisor knew the system inside out but then she had been doing the job for best part of 10 years.

sandralovescats

tight_jock wrote:

That all depends on your banks policy. I think I have seen people recommending Nationwide on here before so it may be a case of going into local branch and letting them know the situation and ask them if they can give you advice about what account to open or if you can use the existing account. This should not cause any problems unless they are one of yoour creditors.

I was told it is the individual bank which will freeze your account when notified of your status by the OR and not the OR who directs it. Pretty sure this is the case.

When Mike went bankrupt his bank, which I think was Nationwide if memory serves me right, he was allowed to keep his cheque book too!
If you have no borrowings with Nationwide they should allow you to keep your account open, but will have to withdraw any overdraft facility since this is outwith the terms of the bankruptcy.

scootw1

just spoken to the IP about letting the creditors bankrupt me. They said they have only ever had one case of the creditors funding it and also said the creditors would probably apply for a statement of earnings order. Now, if the meeting for the vote is on 6th February and they vote no, would I be able to file myself in February before they apply for the order? It would be around 26th Feb that i would file.

binderdundat

Greetings fellow bankrupts/bankrupts 2 B.....

installspark

sandralovescats wrote:

State Benefits are NOT included as part of any IPA calculation, or for the setting up of an IVA

There have been examples on this thread of just that scenario.

Please citate the source of this information including any update bulletins. However I think that you are referring to the Insolvency Service Technical manual

31.5.17 State benefits

In the majority of cases state benefits will not vest in the trustee. The Social Security Administration Act 1992 section 187 provides that benefit as defined in the Contributions and Benefits Act 1992 section 122, any income related benefit or child benefit shall not pass to any trustee or other person acting on behalf of the beneficiary’s creditors on the bankruptcy of the beneficiary.

However you are taking this out of context as it needs to be read along with


31.5.7 Bankrupt's earned income - income payments agreements and income payments orders

A bankrupt’s income is not described as exempt property in section 283. It is, however, recognised that the bankrupt should retain sufficient of his/her income to meet the reasonable domestic needs of himself/herself and his/her family. If the bankrupt has income in excess of those domestic needs, he/she can make voluntary payments under an income payments agreement under section 310A. If a bankrupt refuses to consent to an income payments agreement and the trustee is of the opinion that he/she is in a position to make payments from his/her income the trustee can apply to the court for an income payments order under section 310 (further details of this are contained in Chapter 31.7 - Income Payments Agreements and Income Payments Orders)

and

31.7.9 State benefits

An IPA should not be sought where the bankrupt's only or main source of income is state benefit payments without any other significant source of income [note 3]. This applies even in the rare circumstances where the official receiver's analysis of the bankrupt's income and expenditure discovers sufficient surplus for an IPA arising as a result of the income received by the bankrupt which either solely or chiefly comprises state benefits. The official receiver should consider that it is always open to the bankrupt who 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 repayments.

This does not mean that the official receiver must exclude all benefit payments received by the bankrupt when calculating available income for an IPA. The person making the calculation (usually the examiner) should first consider whether there is income paid to the bankrupt not comprising state benefit . If this is the case, an IPA may be a possibility, and any calculation of income should include all available income, including state benefits which are paid to an individual for the general benefit of that individual and their family. The notable exceptions to this rule when dealing with state benefits are disability living allowance (which is not considered by the Department of Work and Pensions to be income) and child benefit. The High Court has stated as a matter of public policy that child benefit and similar benefits should not be included in the statement of income when applying for an IPO and there is no reason why this point should not be extended to cover IPAs. Whilst it is acknowledged that in the figures for expenditure there may be outgoings for the benefit of the children, at least to the value of the child benefit received, to ensure that there is no risk of them being deprived of it, child benefit should not be included in IPA assessments. The Department of Work and Pensions website provides useful information regarding allowances and benefits currently in force and can be accessed at http://www.dwp.gov.uk/

Where the bankrupt is in receipt of benefits and other sources of income, 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). An assessment can then be made as to whether the bankrupt is in receipt of income surplus to his/her reasonable domestic needs. If there is a surplus of income, this surplus should be less than or equal to income from the source other than benefits in order for an IPA to be sought. 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, the surplus income from which an IPA is sought should not be comprised of state benefit.

Again this should be taken as guidance only as it is out of date an TO's have been issued to which the public are not privvy. Also it allows for a wide degree of interpretation by the OR or IP. Generally speaking state benefit means an income related benefit or child benefit. It is still possible to receive an IPA whilst being in receipt of DLA

installspark

sandralovescats wrote:

When Mike went bankrupt his bank, which I think was Nationwide if memory serves me right, he was allowed to keep his cheque book too!
If you have no borrowings with Nationwide they should allow you to keep your account open, but will have to withdraw any overdraft facility since this is outwith the terms of the bankruptcy.

There are many cases of where people who have gone BR and the OR has had no interest in the account, only to find that the bank freezes and ultimately closes the account. However as you have pointed out there are also a similarly equal number of cases where the bank has been happy to let the account continue pretty much as is.

It would be safer to open a new parachute account after you have gone BR

binderdundat

After a lot of agonising and guilt trips, I finally went bankrupt in Nov05.
I like a lot of other people, was pleasently surprised at the understanding and compassion shown not only by the court clerks and the judge but also the official receivers office. In fact, I was amazed ! It didn't stop the guilt trip but it certainly reduced the stress (self inflicted) to a more bearable level.

I found that being honest, upfront and getting the forms filled and returned ASAP, sped things up considerably. I had a couple of calls/emails from the OR and was eventually discharged Aug06.

It's been mentioned before. The courts/OR are not out to get you. They are simply doing their job and a bloody good one at that !:T

A tip. Don't let the stress get to you. I still believe that the experience was a contributing factor to the heart attacks I had a couple of months later......! and I was only 48 !


Question: Has anyone experience/knowledge of the effect bankruptcy has on looking for work? I have been through the 'over qualified', 'don't quite meet the criteria', etc etc etc (in other words, OLD......! and that for over 4 years now). New legislation means a lot of the rubbish I heard already is now illegal such as 'over qualified', as it implies age through experience (?!).....

I am now wondering if the bankruptcy label could be used as an excuse as well.


Question: Anyone using pre-paid cards? I have seen a posting referencing one of these but I have a problem paying charges on every turn and/or a monthly fee and/or loading charge. After all, they have the money earning interest for them already.

The best appears to be the one offered by BOI via the Post Office. Problem there is the initial load of £250.00


Question: I have a cash account with Nationwide and they are good BUT I would like a debit card. It saves so much hassle (ever found the 1 cash machine around that has no cash!). Debit cards are based on money available in the account, so not much different from using cash except the convenience.

Any suggestions?

Many thanks

bluejulie

installspark wrote:

There are many cases of where people who have gone BR and the OR has had no interest in the account, only to find that the bank freezes and ultimately closes the account. However as you have pointed out there are also a similarly equal number of cases where the bank has been happy to let the account continue pretty much as is.

It would be safer to open a new parachute account after you have gone BR

Thanks for all messages.
I am just worried if I am going to be able a new cash account when I go BR.
And I have to think in advance as my salary has to be paid somewhere.

installspark

Try the co-op cashminder account. This account comes with a visa electron debit card

bluejulie

installspark wrote:

Try the co-op cashminder account. This account comes with a visa electron debit card

Can I apply online?