Urgent news on IPA's - Changes for BRs after 01/12/2010

WLITC

Hopetobefree01 wrote: »

Hello All,

I having been trying to work my way through an expenditure sheet based upon what my current outgoings are based upon my new wage I will be getting in January.
However when doing this I would have an amount over £20.00 for them to attach a IPA - however Im currently living in shared accomodation and into the new year I want to move out - this will then in turn increase my expenditure of outgoings etc - what would happen to the IPA then should I have no more surpless left over?


Any advice..
Thanks,x

Hopetobefree, if you initially get an IPA because you have an excess of more than £20, then once your circumstances change you would (and are legally obliged to) inform the OR. They would then adjust the IPA, which in your case would mean putting the IPA on hold. However, once the IPA is in place, it will sit there waiting to be reactivated anytime during the 36 months from the start date. So should you circumstances improve again then you would restart paying. However, no many how many times it starts or stops, the entire period of the IPA is 36 months.

fiveyearplan

i'm so glad my BR is over and done with. This will just make people be more 'creative' when filling in their I&E. £10 per person per month to cover emergencies won't be enough to cover any kind of emergency like having to get a new tyre for a car, extra prescriptions, new pair of glasses etc, things that I never even put down on my form.

Tupperware_Queen

fiveyearplan wrote: »

i'm so glad my BR is over and done with. This will just make people be more 'creative' when filling in their I&E. £10 per person per month to cover emergencies won't be enough to cover any kind of emergency like having to get a new tyre for a car, extra prescriptions, new pair of glasses etc, things that I never even put down on my form.

there is no need to be 'creative' about these sort of things, they are legitimate expenses, and should be calculated, averaged out and included.

fermi

sunsetgal wrote: »

I am very confused too. Even more so since my daughter has been in the hands of Debt free direct paying at least half her income monthly and living with us as she has no assets and no home since her last job which included accommodation.

She has been contacted by a company called consume action group and tol d that she should go into voluntary bankruptcy and they can help her as she only has to pay a small amount to them for 6 months and then pay for the court fees and that's it. I am very worried as I don't see how this can be the case. My daughter doesn't understand how this all works and is very financially naive. That's how she got in to debt.

The company that contacted her mentioned this website in favourable terms and seemed to imply that they were approved of...! I find it difficult to help my daughter as she is an adult and feels should be coping but when I find her constantly depressed and suicidal I don't know how to help. My husband is retired and I should be but can;t while worrying about her. Is there any likely truth in what this company is saying. We are in a state over this. The TV debt co doesn't seem to be paying the money they take from her to the debtors as they send her statements and they don't show the money has been paid to them....

Moved to a new thread.

https://forums.moneysavingexpert.com/discussion/2923052

fiveyearplan

Welcome sunsetgal. I would suggest your daughter phone either Citizens Advice Bureau, CCCS or National Debtline. You can get their contact number on the front page of this forum or click on their name in Fermi's signature above this post. They all offer free, non-partial advice and are the only companies that we recommend people deal with. The company your daughter is with will be taking a big chunk of the money she pays for themselves each month before paying anything to her creditors.

davidgmmafan

"there is no need to be 'creative' about these sort of things, they are legitimate expenses, and should be calculated, averaged out and included."

Agreed, but how do you calculate for example clothing if, in a desperate attempt to pay things off, you've simply not bought any for eons (and it really is getting ridiculous?). Take your best guess of what you would've spent if you had been living normally?

Tupperware_Queen

davidgmmafan wrote: »

"there is no need to be 'creative' about these sort of things, they are legitimate expenses, and should be calculated, averaged out and included."

Agreed, but how do you calculate for example clothing if, in a desperate attempt to pay things off, you've simply not bought any for eons (and it really is getting ridiculous?). Take your best guess of what you would've spent if you had been living normally?

well, I calculated kids school uniform costs by working out essential items which have to be bought at school - sweatshirts with logo (2) (grr) - then 3 pairs of trousers, 6 polo shirts, one pair of shoes, one pair of trainers, 10 pack of pants and socks - priced up on asda george website, then divided by 10 - to give a monthly cost with a little leeway for emergencies such as damaged/lost items etc and PE stuff, which I only replace when its outgrown.

I imagine you could do something similar for each member of your family - yes it takes time, but at least then you know you have a jusifiable figure, and some 'workings out' to show the OR if asked.

davidgmmafan

I have another question I just though of (due to massive amounts of overtime!).

If I understand this correctly there would be absolutely no point doing overtime post bankruptcy. If you have an IPA under the new rules then any additional income would go into the pot. Impact - no overtime getting done. Just seems counter productice.

Before they would've gotten a cut of any overtime. Hmm. And now they are going to have people trying to hide stuff all the more. Despite what the rules say about telling the truth, when you are talking about people's families they will do anything to protect them. It is of great concern. Glad I don't have kids.

wolfers

I agree. Evidence suggests that if you cut taxes, total tax revenue rises because people are more inclined to be entrepreneurial if they know they are going to be keeping more of the proceeds of their efforts. As a result the economy grows and so the total tax revenue grows. Equally, increasing taxes can decrease the overall tax revenue.

A 100% IPA is effectively a 100% tax. It's a complete disincentive to improve your personal finances. Thus, not only is the bankrupt held back from improving his situation, his creditors are held back because the total contribution to the debts will not rise and may well fall.

It's the equivalent of the 95% income tax rates in the 1970s, the effect of which was to drive entrepreneurs and other successful people out of the country. And that is what will happen here: people will sit on their hands until they are discharged.

And there's no point is saying that those people are bad people and that you would never do that. People are people. Live with the reality not the dream. Bankruptcy now is all stick and no carrot: under that model nobody wins.

davidgmmafan

Totally agree, I think I'll write to my MP. Totally pointles sof course, but as she's labour might get a decent question on PMQ's. The trouble is when this is raised it often turns into a debate into the morality of bankruptcy.

My employer has double time overtime for the next four weeks. I'm doing some this week and last week, if I was bankrupt (as I will be in the new year) there would be no point. So no extra money for me or the creditors. Magic.