Unsure what happens after discharged from sequestriation

confused_29_year_old

Hello guys any help would be greatly appreciated..!

I am currently half way through my sequestriation. I have been discharged after the first year as expected but still have to pay the Trustee a fee each month as agreed up to the end of year 3. I currently have changed jobs and am earning more that my prevoious job. will i have to pay the trustee more money for ther fee and the creditors. or as i am discharged after the year does it meen that i just pay the fee. I am actually looking to save money is this possible.

I have had a horrible 2 years up to this point and have scraped through life providing for my family and now that i have had my first good brake with a job want to try and rebuild for the future is this possible?

thanks for your time

fermi

What do the terms of the Income Payment agreement you signed for the trustee say about increases in income?

confused_29_year_old

Hey thanks for your swift response..!

Basically on the terms that I have signed it does not say anything about the IPA changing and just really states the date of when i start paying and the end date in 3 years and the set amount, so it seems that I will not have to pay any more extra as I have been discharged. does this all sound like it makes sense? The bit the i find strange is that i get a 6 month review every 6 months till completion of the 3 years...!

thanks for any help i am new to forums but just needed to try and get some answers..!

coolcait

This is the standard Income Payment Agreement form in Scotland. It is part of the legislation.

http://www.aib.gov.uk/guidance/publications/forms/debtorsforms/form20/form20pdf

The notes at the end do say that the IPA can be varied, if you and your trustee agree this. There's also the option for the trustee to ask the Sheriff to impose an IPO - but I have no idea how likely it is that this would actually happen.

Once thing which people often forget is that their expenditure may also increase at the same time as their income. For example, higher travel costs, higher childcare costs and so on.

Your trustee can only ask for an IPA from your disposable income. Make sure your SoA is as accurate as it can be.

fermi

Hmm. Does not explicitly state that you have to inform the trustee of increases in income, but does set a specific date for review, at which I assume any increase not otherwise declared would be discovered and an appropriate variation sought.

coolcait

It's all in different parts of the legislation.

There's a requirement to immediately inform the trustee of a change of address or change in financial circumstances during the period of the sequestration.

This is one of the things specifically listed in the 'statement of undertakings' which people are suppoed to sign at the beginning.

It's also a requirement that the person fills in, and returns, a current statement of affairs every six months. Some people have been given a BRO for not doing this.

That's not a typo. I did mean 'BRO'.

There have also been BRUs too.

confused_29_year_old

another question, is the period of sequestriation the point up to when you are discharged? or the 3 years? I have informed the trustee of my new job
so it looks like in my next review this month, I may have to pay more all very confusing my terms are very grey and have no definitive answer.
thanks for the info people so many questions still and i am already half way through my 3 years.

fermi

coolcait wrote: »

It's all in different parts of the legislation.

There's a requirement to immediately inform the trustee of a change of address or change in financial circumstances during the period of the sequestration.

Yes. I'm aware of that. Same in England. But here that duty lapses when you are discharged. After that the duty only continues if you have agreed to do that under an IPA agreement (in theory). There is still a general duty to cooperate with the OR/trustee.

Until a while back, the English OR had misworded IPA agreements:

See for original and changed wording: http://forums.moneysavingexpert.com/showpost.php?p=59743817&postcount=7

With the result that in theory (until corrected) that there was no duty after discharge under an IPA to inform of increases.

Not saying that applies in Scotland, but more what exactly does apply after discharge?

Does that 6 months review continue (or what period specified in the IPA)? Or are you obliged to inform of changes as they happen through the IPA after discharge even though it doesn't say that in the IPA?

fermi

Implies that the obligation subsides after discharge, unless, presumably, otherwise specified in an IPA?

coolcait

Interesting stuff, fermi - I wasn't aware of that history with English IPAs. Then again, it can be exciting enough keeping up with the changes and proposed changes in the Scottish legislation! :rotfl:

I'm not a lawyer, so I can only give you my knowledge and understanding of the way things work here at the moment.

As things stand, a person is required to provide an up to date current state of affairs every six months. If someone has an IPA or an IPO, they still have to provide this, even after the date of their personal discharge.

As the trustee has a duty to manage the estate for the benefit of creditors, an increase in surplus income could be expected to lead to an increase in the IPA or - if the Sheriff agrees - an IPO.

When a person is discharged from sequestration, they are no longer personally liable for the debts they owed at the date of sequestration - with the usual exceptions. Nor do they have to declare to the trustee any assets acquired after the date of personal discharge.

However, a person's personal discharge from bankruptcy does not discharge them from the obligation to co-operate with the trustee. (Section 55 of the Bankruptcy (Scotland) Act 1985, the effects of discharge, covers this)

As part of the obligation to co-operate with the trustee, the person is required to 'execute any document which may be necessary to enable to trustee to perform the functions conferred on him by this Act' (Section 64).

Section 64 also say "In this section, "debtor" includes a debtor discharged unbder this Act".

Section 43A, which covers current statement of affairs, is clear that it covers people who are in an IPO or an IPA.

As I'm not a lawyer, I can't say whether or not any of that could be challenged in court.

As things stand, it's generally accepted that the legislation means that someone who is in an IPA or IPO has to fill in a current state of affairs every six months - even after the date of personal discharge - and that may lead to the IPA/IPO being varied up or down.

Or, to be slightly shorter and not so sweet about it - the sequestration doesn't finish completely until the trustee is discharged. And you have to co-operate with him/her until then.

There are a couple of milestones along the way - personal discharge after a year, at which point you no longer have the bankruptcy restrictions etc. And no more worries about acquirenda.

The next milestone, if you have an IPA/IPO, is the end of having to pay that.

TBH, after that point, the fact that the trustee hasn't been discharged shouldn't really be a problem for the individual anyway.

fermi

Much as I expected. I would assume that there is a double lock on that, as the IPA agreement itself specifies a review date, independent of any external requirement. Presumably that is set at 6 months and advances at each review.

The link to duty to cooperate and review of a post discharge IPA isn't (I think) as explicitly linked in the legislation in England, hence the the Insolvency Service here expediting that change in wording, :cool:

However 6 monthly reviews post discharge is fine. Not really what was asking.

In England the duty to report increases in income is not a 6 monthly review. You are expect to report changes yourself within 21 days.

Is that similar in Scotland?

i.e. Can the OP wait for the next 6 monthly review to report the increase? Or do the have a duty to do it now?