Bankruptcy IPA Calculation Question

Trinitrotoluene

Hello there,

I've posted previously and people have been of a great help. My partner has now gone bankrupt and the OR has determined she doesn't need an IPA but she is just below the threshold of needing one. I'm worried that a small change in circumstances will render her with an IPA she doesn't necessarily need.

Does anyone know how they calculate this when they both know the Bankruptee (my partner) and my own salary/incomings? The OR asked my partner (the bankruptee) for my Salary, and she told her what my salary is.

For arguments sake I will use simple figures to make calculations easier. Lets say for example my partner gets paid 500 a month. Lets say I get paid a thousand.

So total household income = 1500
total household outgoings = 1000
Surplus for Bankruptee = 0
Surplus for me = 500

I am assuming this is not how they calculate it though, they must base it on a percentage. My question is does anyone know what they base it on?

Thanks in advance

debt_doctor

Hi,


They pro rata your incomes so if for instance you earn 3 times more than your partner, 3 times more of your income would be apportioned to household costs.
The surplus can only come from the bankrupts income. If the non bankrupt has, perhaps debts of their own which they are paying the normal payments on then these costs have to be allowed.


DD

Trinitrotoluene

Thanks debt doctor, I'm not quite sure I get what you mean with if I am paying debts of my own. How do they get allowed? Do you mean they can go in the statement of affairs as a cost?

As for your first point in our actual circumstances I get paid 110% more than my partner. Based on what you said that means I'd be responsible for just over two thirds of the outgoings. If my partner got a small pay rise, then assumingly if my income stayed static the 110% more would reduce and my partners would increase. That would mean my partner (the bankruptee) would be responsible for a bigger percentage so the wage increase would not matter and she still wouldn't get an IPA

I'm sorry if this is confusing, I can try explain better if you don't quite get what I am saying!

coolcait

I can understand why you want to be prepared for the worst.

At the same time, "preparing for the worst" can mean that you spend much of your life in an unnecessary state of worry.

The fact is that your partner's OR has determined that your partner's surplus income is not sufficient to sustain an IPA.

Could this change? Yes. Will it change? No one can say (unless you know something we don't). There's also the chance that things won't change.

So, you could rest content for now. No IPA. No foreseeable changes in income.

You could spend the next year going through scenarios where this circumstance changes, or that circumstance changes, and your partner might get an IPA.

That's a lot of stress. Why put that on yourself?

If for some reason your partner's situation changes, you can come back to this board for advice.

People often forget that an increase in income can also bring increases in expenditure - e.g childcare costs, travel costs.

So, a change in circumstances doesn't necessarily mean that there will be an IPA.