Inheritance after discharge?

JulesJay

Hi guys

Just need to check if anyone knows out there, what would happen if you came into an inheritance after discharge?

I know they would take it from you before discharge but there seems to be conflicting info from other places that I have tried to get clarification from?

Anyone could maybe point me in the right direction?

Thanks in advance

Jules x

shameless-about-money

If you have been discharged but are on an IPA any inheritance or windfall you acquire will be taken by the bankruptcy.

If you have been discharged but did not get an IPA any inheritance or windfall will be yours to keep 100%.

im1dful

shameless-about-money wrote: »

If you have been discharged but are on an IPA any inheritance or windfall you acquire will be taken by the bankruptcy.

Please can you quote your source?

As far as I am aware, after acquired property can only be claimed in the bankruptcy while the person is undischarged.

The IPA has no effect on after acquired property. If someone's income goes up after they have been discharged, the IPA amount can't be increased.

wherediditallgo

im1dful wrote: »

Please can you quote your source?.... If someone's income goes up after they have been discharged, the IPA amount can't be increased.

According to this site, it can. It says that "You enter an IPA voluntarily, but it is a written and formal binding agreement between you and the official receiver or your trustee. The agreement can be varied if your circumstances change..." and also says that you must immediately contact your trustee if your circumstances change.

On this other site, it says "The IPA can be variable by nature. This means that if your circumstances change during the term of the agreement, then the amount you are expected to contribute may be increased or decreased accordingly." And this site says "An IPA may be varied in writing".

It therefore seems to me that, not only would you have to declare it immediately while your IPA is in force, you could find yourself in a lot of trouble if you didn't. Hope that helps.

shameless-about-money

you are quite correct!

The IPA can be varied dependent on the circumstances like change of job or increase/decrease in pay, etc. Also any monies coming in from any source must be declared until the 36 months is up.
Any changes MUST be declared in writing to the OR within 21 days of the change taking place, as per the agreement you sign when you take on the IPA in the first place - not to do this is an offence which carries a prison sentence.

fatbelly

JulesJay wrote: »

... what would happen if you came into an inheritance after discharge?

I know they would take it from you before discharge but there seems to be conflicting info from other places that I have tried to get clarification from?

I put this exact question to the OR in Plymouth a couple of weeks ago. The answer was that there would be no claim by the OR on the inheritance, whether or not an IPA/IPO was in force.

wherediditallgo

I would have thought there was a difference between the requirement to disclose the inheritance, and whether the OR actually makes a claim against the inheritance.

The IPA agreement requires you to disclose any change in circumstances during the length of the agreement - it's what you sign up to at the start of it, & can be for up to 36 months. Unless your circumstances are unusual, your bankruptcy will probably end before that, but the terms of the IPA still remain in place until it expires. If you tell the OR about the inheritance & they choose to do nothing with the information, that is up to them. But you have no choice about whether to tell them about it. And not to do so would give the impression that you were trying to hide something, hence the stiff punishment (i.e. prison sentence) that could be handed down as a result of the non-disclosure.

Look at it this way, the IPA is for you to make a contribution towards the cost of your bankruptcy to your creditors. If you withhold that you've inherited money or property, it looks bad - they're not to know whether it's £1000 or £1m until you tell them, but if they hear about it outside the time given by the IPA or hear about it from someone other than you, they'll not be pleased. I think the larger the amount you've kept quiet about, the greater the chances of you being penalised as a result, especially if your dealings with the OR haven't been great or if you've been bankrupt before. If you've inherited a relatively small amount, the chances are the OR will do nothing about it, but it's not really for you to decide.

shameless-about-money

fatbelly wrote: »

I put this exact question to the OR in Plymouth a couple of weeks ago. The answer was that there would be no claim by the OR on the inheritance, whether or not an IPA/IPO was in force.

I am sorry but this is NOT TRUE!

wherediditallgo

In all honesty, if I had an IPA & then got an inheritance, I would tell the OR - I would take the same attitude over a lottery win, or getting a second job. By the time I'd got to the stage of having an IPA, I'd have already gone through the stress etc of trying to sort out my financial affairs, & the IPA is like the homeward stretch of it all. I would see no point in getting so far, only to risk everything going pear-shaped just because I hadn't owned up, knowing full well I had agreed to do so at the outset. And don't forget that once you've been found to have withheld information on one occasion, people tend to look a bit closer at everything you do after that because the trust has been damaged.

You can't put a price on peace of mind.

fatbelly

shameless-about-money wrote: »

I am sorry but this is NOT TRUE!

Please could you quote the section of the Technical Manual that relates to this. It's obviously of great concern if the OR is giving false information to prospective bankrupts.

shameless-about-money

If an IPA is given it must be given whilst undischarged.

In an IPA all monies must be declared to the OR - all increases/decreases in wages, all overtime/bonuses etc so it follows that all other monies be also declared, whether you have won the lottery or Aunt Mary dies and leaves you £20K in her Will. The IPA is given to recoup some of the losses from bankruptcy for the creditors and that is why the income is monitored for the 36 months that the IPA is active.

If you look at it logically, any windfall MUST be included since you are in a period where your income is being restricted and charges are being made against your income.

If a BRU is given, this does not apply, unless an IPA is also given, where the windfall restrictions would apply for the 36 months.

I have sent an email to the Insolvency Service for clarification on this point - we shall see what comes back.