IPA Avoidance

debt_doctor

Superb Alastair.

DD

kepar

debt_doctor wrote: »

Superb Alastair.

DD

The thing is DD, I would accept your comment more if you had been through the process and not just advised people .

debt_doctor

kepar wrote: »

The thing is DD, I would accept your comment more if you had been through the process and not just advised people .

BSC number 100 you will see in my signature.

I was bankrupt in 2006.

DD

coolcait

Maybe I'm less shocked by the 'new' IPA system in England & Wales because it's pretty much the same as the Scottish system has always been.

Some trustees might have decided not to try to get a contribution/IPA from a small surplus. Others would have taken the full surplus anyway. I don't think any trustee would ever have ignored a surplus of up to £99, and not tried to get a contribution or IPA/IPO....

It's also interesting to see how the SoA arguments change depending on the context. On the one hand, if someone comments that "you can feed a family of 'x' for a lot less than £'amount allowed by OR'", they are informed that the SoA for bankruptcy is more generous than other types of SoA (for various rational reasons).

On the other hand, there are threads such as this which give the impression that a bankrupt person is allowed the absolute minimum to live on.

So, which is it? Relatively generous or absolute minimum.

We are also informed that these more generous allowances give people more flexibility. Which is true. Someone who is given a budget of - say - £400 per month to feed their family, but manages to feed them on £300 per month (and this is the right site to get tips which make that achievable!) will have an extra £100 in their pocket. Fully 'within the rules'.

Finally, I often see people say that they wouldn't mind paying an IPA if the money went to their creditors, rather than paying the OR's fees (of course, I also see a lot of people saying that they see no reason why they should pay their creditors, given the way those creditors harassed them!).

Does the money you pay to make yourself bankrupt go to the OR, and is it sufficient to cover the costs/fees in every case? If not, and there is no IPA in the case, who covers the shortfall?

In Scotland, it's the taxpayer who picks up the tab in those cases. Is it the same in England?

If so, why shouldn't those who have a surplus of up to £99 also have to make a payment towards the costs?

And, if all of the costs are covered by the court fees, then the money paid through an IPA will go to pay back the debts.

I sometimes wonder if part of the resistance to paying an IPA comes from the attitude that you are 'debt free' at the moment you are declared bankrupt. That's certainly not the case in Scotland. You no longer have to deal personally with your creditors - that duty is passed onto the trustee. But, the debts still exist.

debtinfo

It's not very often that I feel I would thank a post more than once if I could, but coolcait's post is probably the most sane and balanced post yet made on this thread. It is always worth considering how your complaints about our system looks to people who have been through bankruptcy in a different country

kepar

Most posters on here see br as a release from the mountain of debt they have accumulated over time. They have been driven to despair with phone call/letters at a constant rate. In the end something had to give and against their will they went bankrupt.
They were at the last line of defence and that was being breached, they had no whetre else to go and that was the only option.

The removement of the debt enabled them to get back to live a normal life and in a lot of cases better as they did not have debt to pay and their allowances enabled them to live a normal life.

There are some who when posting a SOA, still have their outgoings exceeding their income by some way and don't realise that this has helped put them where they are. In that they have had to use credit to maintain that lifestyle. Once bankrupt where is the extra money going to come from.

We found that after br, because our debts had been so large that our living standards improved dramatically, we could actually afford to do things as well as eat.
We had battled to the end the credit wells had dried, the only option left was br, it was not an easy decision, it is something that will stain you for life. You will always be known as a bankrupt. If your name appears in the paper and the reporters do some digging you can be sure that it will appear in the article.
Those who see br as a tool, it is all right they say it only big business losing out, but what about the small businesses, family, friends and any one else who has lent you money. It is my right to go br and I am not going to get an IPA, if I do I will fight it all the way. They feel that br has exonerated them of all responsibility.

But who pays for it all, those who do get an IPA subsidise those who don't and as we know those on benefits are not asked to contribute.

So my question is how would the IS survive if the next 50,000 people to go br were all on benefits. No IPA's , no income.


A year ago everyone was trying to scramble under the magic excess of £100, now either they have well in excess of that or basically no spare showing. So does that mean that the new allowances have enabled br's a better standard of living by going up to cover the loss of the excess.

alastairq

I don't see the observations and questions which are raised by this topic as 'complaint'.


What folk seem to forget is, by its very nature, BR really is the end game..the last resort.

If it were an option, then what were the alternatives?

Without BR, there was absolutely no other way, as an example, that my own accumulated debts would have ever been resolved...certainly not in my lifetime!

[Not that I 'borrowed' excessively..probably less than many...and I've pretty much always been in employment.....much of the debt consisted of penalties, and excessive interest rates]

so....do we leave creditors in limbo? Unable to resolves debt situations?


Or do we use the Law to finalise everything?

[much like marriage and divorce...marriage is a legal state as much as anything else....when things turn sour, do we continue to live together, with the adverse effects that will have on everybody concerned? Or do we go our separate ways, petition Divorce, to allow ALL parties to start afresh?]

What is forgotten is, the taxpayer...sometimes by not-so-obvious means, subsidises pretty much every financial model.


I draw folks' attention to things like tax-relief, off-setting, etc?

davidgmmafan

"Not only this 100% means there is no value in people taking on overtime as they will get nothing, at least with 50% or 75% IPA's there is some encouragement to earn a little extra for both yourself and your creditors."

I agree 100% its madness. To be fair I think its the title that throws people. IPA avoidance does sound a bit dodgy, it could easily be called overtime question or something similar...

alastairq

at one time, folk would give serious consideration...for tax reasons, to doing overtime.

Certainly, I re-consider overtime if it is but a one-off, or very occasional in nature..is it seriously worth my time and inconvenience?

Especially if not paid at an enhanced rate?

I ignore any overtime, for example, of less than 3 hours.

And if there is any suggestion of 'time-off-in-lieu', then management can forget using me!

Another argument now forgotten, but once, IIRC, used politically..is that a person working overtime is depriving another of a job?

In other words....forget the emotive/moral argument..ask yourself, is it really worth it?

[remember, overtime is 'market-driven'.......it is there, at the very best rates, if there is a shortage of skills-required.......

If it is simply in place to maximise profit at minimal cost...then you get paid, or not, at whatever rate the employer thinks they can get away with.]