Last Minute IPA ?

Brupt

Hi all

I am writing as a relative newbie but have been lurking for quite a while. Firstly I must say that I have found the forum to a reliable and accurate source of information aswell as a place of comfort in difficult times. It really is a credit to all those who contribute.

A brief introduction to my circumstances and experiences will no doubt make familiar reading to some and although ultimately irrelevant to my query I shall bore you all the same.

After redundancy I was unable to maintain payments to creditors and after seeking advice from the CAB embarked on a period of £1 token payments. Once back in work I started a DMP with Payplan and maintained this until once again at the end of the contract found myself on the dole.

All this probably occurred over a 2 and a half year period and it was tough and turbulent for the whole family and I felt we needed some finality to the situation and a glimmer of light at the end of a dark tunnel. We found this through bankruptcy, a decision taken in conjunction with the CAB, a marvelous organisation by the way.

The process of bankruptcy filled me with dread and sleepless nights were the norm leading upto the court date. I know most people say the same and it is true, it really isn't half as bad as you expect and the feeling of relief is immense. I also experienced feelings in the aftermath of embarassment and regret that it had come to this but overall found it to be a positive process.

Anyway that was then and this is now, I have just had an interview for a job during which I indicated that I would be unavailable til November, my automatic discharge date is the 25th November. I have now been offered the job, it is a good opportunity with long term prospects and I have accepted it. The start date is the 1st November (non negotiable) and I just wanted some clarification as to my obligations to the OR i.e. how soon should I notify them of my change in circs., what is the latest I can leave it etc..

I am resigned to the fact that this will more than likely result in an IPA and I know there is a moral argument for being prepared to pay back our debts (30K by the way), however if I am being honest I will be gutted to come so close to AD and receive an IPA at the last minute.

In posting I know I should be grateful for my new opportunity and take any IPA that results on the chin but any comments, suggestions Good or Bad would be greatly appreciated. Finally can anyone shed any light on the process of early discharge, is it totally random or is there logic to it within the OR offices up and down the country.

If you have reached the bottom, thanks and sorry for the long post.

debtinfo

well the simple answer is that you should tell the OR within 21 days of your circumstances changing

Brupt

Thought as much debtinfo, thanks for replying. I fully intend notifying the OR of my change in circs. within 21 days of starting work, but I am curious as to what will happen when my notification is received as the OR's response will almost certainly come after my AD date. I suspect my AD would be irrelevant due to my change of status coming 24 days before, would you agree.

freddy911

Dont they have to have the IPA agreed before discharge? If you take your time notifying them, leave it 20 days and send it by special delivery, maybee you will get away with it? I think it takes a few weeks to set up, thats if you agree to it, if not they would have to go down the IPO route, can this be done post discharge?

Brupt

Not exactly sure what the rules would be srichar3, kinda hope what you say is true but the pessimist in me expects that when he OR receives my letter, say 3 days before my AD, then this initiates the IPA process regardless of discharge date.

freddy911

Not sure how to interpret this;

31.7.8 IPA can be set up by the official receiver before he/she is trustee
An IPA can be agreed early in the bankruptcy proceedings as the official receiver can set up the agreement and start collecting payments under the agreement when he/she is receiver and manager, before a trustee is appointed. The legislation provides for the IPA to be agreed between the bankrupt and the official receiver or between the bankrupt and the trustee.

31.7.9 Agreement must be signed by the bankrupt and the official receiver to bring it into force before the bankrupt is discharged
An IPA can only be entered into prior to the discharge of the bankrupt URL="http://www.insolvency.gov.uk/freedomofinformation/technical/technicalmanual/Ch25-36/Chapter31/part7/part1/part1notes.htm#6"][COLOR=#0066cc]Note 6[/COLOR][/URL and only comes into force when the official receiver or trustee signs it URL="http://www.insolvency.gov.uk/freedomofinformation/technical/technicalmanual/Ch25-36/Chapter31/part7/part1/part1notes.htm#7"][COLOR=#0066cc]Note 7[/COLOR][/URL. This means that in order to ensure the IPA is valid, the agreement must be signed prior to discharge by the trustee or official receiver. The bankrupt can be allowed up to 14 days (or longer, if specified by the official receiver) to consider a draft IPA, sign and return the agreement URL="http://www.insolvency.gov.uk/freedomofinformation/technical/technicalmanual/Ch25-36/Chapter31/part7/part1/part1notes.htm#8"][COLOR=#0066cc]note 8[/COLOR][/URL. The policy of the Service is to allow a 14 day "cooling off" period after the bankrupt has signed the agreement. This is not a requirement of the legislation and it must be remembered that for the agreement to come into force it must be signed by the official receiver prior to the bankrupt receiving his/her discharge(see also Part 5 paragraphs 31.7.133 to 31.7.137). The official receiver should not delay signing the agreement where the bankrupt’s discharge will occur before the 14 days expires. Ideally the agreement should be signed at the earliest opportunity, in order to validate the IPA URL="http://www.insolvency.gov.uk/freedomofinformation/technical/technicalmanual/Ch25-36/Chapter31/part7/part1/part1notes.htm#9"][COLOR=#0066cc]note 9[/COLOR][/URL. It is especially important to allow enough time for the IPA to be validated where an application is to be made for early discharge (see paragraph 31.7.172).

If you dont agree an IPA, they can suspend your discharge while seeking an IPO

31.7.11 IPAs always to be sought in preference to IPOs
It is envisaged that in cases where the bankrupt has surplus income available to make a payment to his/her bankruptcy estate, an IPA should always be sought in preference to an IPO. An IPO should only be sought in those cases where the bankrupt fails to consent to the proposed IPA or does not co-operate with the official receiver in the collection of an IPA. Where the bankrupt is failing to co-operate in the provision of information to enable an income payments calculation the official receiver should seek to suspend the running of the discharge period (see Chapter 22 Part 4 for information on suspension of discharge).

I think it would be tight for them to do anything

freddy911

So does that mean as long as they write up the agreement and sign it before discharge then its valid even if you dont agree it untill after discharge?

Then if you disagree what then if your discharge date as already past? can they suspend it after its passed?

freddy911

More questions than answers im afraid :P

confuzzled7

I realise I'll be shot down in flames for this but I have to admit that if it was me I'd 'forget' to tell them about the new job as it's so close to discharge.

In the meantime, pray you get early discharge - if that happens you won't have the decision to make anyway! And, no, as far as I know there's no rhyme nor reason to ED and it does seem pretty much random and depends on which OR's office you are with. I was lucky and was discharged after only 6 months.

freddy911

When would you technically have to tell them though? when you start the job? or when you first get you first pay packet?

Brupt

Thanks for the post srichar3, not seen that info before and although quite jargony and open to misinterpretation by a laymen such as myself, it does seem that the IPA would need to be signed, sealed and delivered before discharge. This would take some doing by the OR with 3 days notice. Fingers crossed.

I would need to inform them within 21 days of my job start date and not my first pay date.