How to Challenge an Income Payment Agreement

Flapjackman

This is my first ever post so if I am going over old ground please forgive me.

I find myself in the following prediciment.

My wife and I were both declared bankrupt on 26th October last year. So far it has been a straightforward process. My wife has not worked since and has had no income and I have had two brief periods of unemployment though am now employed although earning a significantly reduced salary to what I have previously been fortunate enough to enjoy a few years ago.
On that basis I have had no IPA set up after filling in 2 Income and expenditure forms. I had to fill in a 3rd form in July and as a result have recieved an IPA yesterday for £74pm. This has arrived 6 weeks to the day before my automatic discharge. We are a family of four (two young children) and are also in reciept of housing benefit and tax credits.
My circumstances have changed since July and I quite simply do not have £74pm spare!

I have cooperated fully up to now and my understanding is that I do not have to sign this agreement and if no agreement is in place within 6 weeks (discharge date) then no IPA can be enforced.

How do I challenge this?
Will the OR automatically apply for an IPO if I challenge them?
Will the OR automatically apply to delay my discharge if I challenge them?

Thank you in advance

Lou67

I have never heard of this happen, but then the only people I know who have ever been bankrupt are me and hubby and two other couples who rarely discuss anything. This sounds a bit unusual. I thought that if an IPA had not been decided by the OR after the bankruptcy, then that was it, unless you come into some significant amount of money (inheritance/lottery win etc...) We didn't have an IPA because we were so very poor and barely had a pot to pee in, and nobody ever asked us to fill in any forms 'after' the bankruptcy. All the income and expenditure was done prior to the bankruptcy, and the OR went off that for any financial info. I wonder why you're having to fill extra stuff in? Maybe things have changed.

I suggest you go to the CAB or contact the OR directly, and ask why you're being asked to pay £74 a month now. That is a big chunk of income out of MOST peoples' salary. And it does seem odd that it's just being asked for now, so close to discharge. Does it say how long they're proposing to take the money.. I personally think when someone goes bankrupt, for the *first* time, that they shouldn't have to pay anything back at all, and even if you earn more income in that first year, as IMO, once the debt has been bankrupted, it's gone, but obviously not everyone is going to agree with that.

Have to say, what is being proposed with you, sounds unreasonable and unfair. It is definitely worth challenging; no WAY should you be paying anything, especially THIS close to discharge.

debtinfo

Lou67 wrote: »

I personally think when someone goes bankrupt, for the *first* time, that they shouldn't have to pay anything back at all, and even if you earn more income in that first year, as IMO, once the debt has been bankrupted, it's gone, but obviously not everyone is going to agree with that.
.

That may be your personal opinion and everyone is entitled to an opinion but i do think it is unrealistic. In every bankruptcy law ever set in the UK a provision has been set to repay some or all of the money if the person is able to do so. It is a fundemental part of the bankruptcy laws and will continue to be so. Bankruptcy is not simply a way of disposing of debt with no consequences or possibility of any repayment.

PippaGirl_2

Yes Lou you've said this before and I don't agree and I don't think it is a helpful view. I think the way things are is fair, that people pay back what they can for a limited time but that it is time limited so as to free a person so they can move on and start again. You are the first person I have heard with this view, fortunately I think most do feel they should pay what they can towards their debt.

OP, sorry I can't help you as that is totally out of my knowledge. Hopefully someone else will know.

minic

Hi flapjackman,

Quick question, you say in your post that your circumstances have changed since July when you last completed the income/expenditure form. Have you notified the OR of the change in your circumstances? If not then they will assume your I&E is as completed in July and that as such you have an excess of £74pm to pay into an IPA.

I would suggest giving your OR a call tomorrow and explaining to them the change in your circumstances so that if necessary a new I&E can be completed which may or may not then result in an IPA.

Hope you get it sorted.

M

tigerfeet2006

If your circumstances have changed again then you need to notify the OR and fill in another SoA with your circumstances as they are at the moment. The OR may decide to cancel the IPA and then that will be it when you are discharged or he will suspend it and set it to £0 but you will still have to infom them of changes for the 36 months and be subject to the rules of the IPA.

Flapjackman

Thanks for the replies.

I didn't inform the OR of changes as I didn't expect him to come back with an IPA from the last IPOQ. Probably should have done in hindsight. It says on the form I have 14 days to notify them if I am not happy so I may request an Incme Expense review and ask how they have worked out the £74 excess. I am just worried that they delay my discharge if they think I am not Co-operating and I really don't ever want to see the inside of a court building again in my life!! The last 3 years since we lost our business has been tough on the whole family and I just want to draw the line and move on!

I will let you know whatthey decide.....

PippaGirl_2

The debt is not written off when you go bankrupt. The debt is written off when you are discharged until then you are still liable for it fully, it is just that the OR deals with the creditors rather than you.

Lou67

Flapjackman wrote: »

Thanks for the replies.

I didn't inform the OR of changes as I didn't expect him to come back with an IPA from the last IPOQ. Probably should have done in hindsight. It says on the form I have 14 days to notify them if I am not happy so I may request an Incme Expense review and ask how they have worked out the £74 excess. I am just worried that they delay my discharge if they think I am not Co-operating and I really don't ever want to see the inside of a court building again in my life!! The last 3 years since we lost our business has been tough on the whole family and I just want to draw the line and move on!

I will let you know whatthey decide.....

I know I said that I was done with this thread, but I just wanted to reply to this post, as I didn't notice it before sorry flapjackman..

I am really shocked that they came back at this stage actually, and imo it's grossly unfair. I would definately challenge it. You barely have any extra cash and you're expected to pay an extra £74 a month for potentially for 3 years?! As I said to you earlier, I think it's wrong and unfair that people have to pay anything once they have gone bankrupt, but that is the way it is unfortunately,... But to make you start paying this late on is very unfair!!!

I and my husband went through hell before we went bankrupt and thankfully did not have an IPA. We didn't earn enough. He is earning a lot more now though, but because our year is gone: nobody can take ANything from us, so we can move on and start over. Genuinely hope you get this sorted. Try talking to a solicitor maybe?

sniggings

I think you should fight it, if you are getting housing benefit that would lead me to thinking you are on a low income.

Seems crazy to be getting housing benefit because of low wages then to be given a IPA.

I would be surprised if I judge would agree, defo worth a shot in court.

kepar

I and my husband went through hell before we went bankrupt and thankfully did not have an IPA. We didn't earn enough. He is earning a lot more now though, but because our year is gone: nobody can take ANything from us, so we can move on and start over. Genuinely hope you get this sorted. Try talking to a solicitor maybe?

Lucky him and you.
That is why I feel it will not belong before everyone gets an IPA to stop this kind of action. That way it would be fair on those who get an IPA and those who can put off promotion or even getting a job. Having to wait three years may make them think differently.