Bankruptcy and unreasonable IPA Agreement

Muckers_Mate

Just under twelve months ago following a long period of ill-health and not working, I was forced to accept bankruptcy. As a result I lost my marriage, home and my car and had to move back in with my parents.

Three months ago, I started a fulltime job and immediately informed the Official Receiver's office. I've only just received through their IPA Agreement as to how much I am required to pay each month for the next 3 years.

All they've done is subtract from my net income, my ESSENTIAL outgoings and then decided that that is the amount I need to repay for the next 36 months.

They've left me with nothing, not even "pocket money". I told them that my job is located in a rural area with no public transport other than a taxi and that I need to purchase a car. I've shown them my job contract which states that having my own transport is a condition of the employment offer.

The Official Receiver responded that they will review the repayments when "I obtain a vehicle". How am I supposed to do this? They've left me with no money to be able to buy (let alone insure) a vehicle for them to review my circumstances.

Is it unreasonable for them to demand that I repay 100% of my income after outgoings? I expected to have to pay a significant PERCENTAGE, but surely not ALL.

The irony is that if I had left looking for a job for a few weeks later and had been satisfied with accepting state handouts until my bankruptcy was over, I wouldn't have had to pay back a penny.

So far, all the advice has been pretty much negative - because the Official Receivers are who they are, they are a law unto themselves and cannot be reasoned or mitigated with.


I would be grateful if any expert here could provide some info?

BTW,
For anyone who thinks bankruptcy is an easy route, it has been the worst, most humiliating period of my life. Even when it's over, it isn't. It's for LIFE.

rizla_king

As far as I've read you don't have to agree to an IPA. You can tell the OR to stuff it and if they want payments of that much then they have to ask the court to award an income order instead. A judge would decide what is fair on that and would quite likely take your side. Others should know more.

Muckers_Mate

Rizla King -

Thanks, I've come across this, but, from what I understand, an income order means money has to be stopped at source. As you may appreciate, I'm not too keen for my new employers to become involved. I just wondered if it was usual for the OR to take all of someone's disposable income, rather than a percentage. I mean this isn't just for a few months, or even a year, but for 3 years. I had hoped my situation would improve having endured the insolvency process, but to be honest I don't see a great deal of difference between before and after. I still have years of crippling debt as well as the permanent branding of Bankrupt.

longtermplanner

Muckers_Mate wrote: »

The Official Receiver responded that they will review the repayments when "I obtain a vehicle". How am I supposed to do this? They've left me with no money to be able to buy (let alone insure) a vehicle for them to review my circumstances.

What do your figures suggest that you need? How much would the insurance, road tax, petrol cost and how does that compare to the cost of your taxi fares, which the OR should now be allowing?

Could your parents buy a v cheap car and let you use that?

Is it unreasonable for them to demand that I repay 100% of my income after outgoings? I expected to have to pay a significant PERCENTAGE, but surely not ALL.

I am afraid that is how IPAs are indeed set.

However I am surprised if you are having problems if you are living at home. The allowances for food etc are pretty generous, surely more than you are paying your parents?

Could you post how the OR has set your IPA? And what you think your actual expenses are? Then we could say if it is worth asking the OR to review these. The "see you in court" approach advocated above is a seriously bad idea.

The irony is that if I had left looking for a job for a few weeks later and had been satisfied with accepting state handouts until my bankruptcy was over, I wouldn't have had to pay back a penny.

Yes, this is annoying. But you are where you are now so what might have been is irrelevant.

For anyone who thinks bankruptcy is an easy route, it has been the worst, most humiliating period of my life. Even when it's over, it isn't. It's for LIFE.

In a few years this and all your debts will be ancient history. bankruptcy isn't great but it was probably better than your alternatives.

rizla_king

Muckers_Mate wrote: »

Rizla King -

Thanks, I've come across this, but, from what I understand, an income order means money has to be stopped at source.

No. You are think of an attachment of earnings order which is a completely different thing.

Muckers_Mate

--
>>
Could your parents buy a v cheap car and let you use that?


<<
My parents (both in their 70's) have given me enough and I can't ask them for anything more.

I spend around £30pd ( £480pm) on taxis fares. I've pointed out to to the OR that if they hold out on the payments until I've saved up enough, or at least something towards a car of my own, then my monthly travel expenses would probably be less, allowing me to make up for the difference later on.

But no.

rizla_king

It's really quite simple. If you don't think the IPA is fair then tell the OR that you are not prepared sign it unless they allow you sufficient funds to purchase a car, and that you are prepared to let a court decide if necessary. The authorities won't want to look like unreasonable fools in front of a judge believe me.

fermi

debt doctor a CAB worker who posts here has had much experience in challenging unfair or unreasonable IPA/Os.

I'll send him a PM, and it might be worth doing so yourself.

alastairq

IPA means agreement....not edict, or demand.

I suspect many OR's officers will use the figures the OP has, as a starting point in the negotiations...a sort-of, bargaining process?

One of the primary issues, that needs to be understood, when undergoing a BAnkruptcy, is the need to gather or collate evidence.

This evidence needs to support the Bankrupt's arguments, when negotiating with the OR.

It helps to have an acute understanding of the rules and constraints the OR needs to operate under [something which Debt Doctor is fully familiar with?]?

AFAIK, if the prospective IPA is not agreed upon before AD, then it cannot be imposed?

If the OR cannot obtain agreement, and goes back to the Court to seek an IPO..if this process is commenced prior to AD, then it stands....but the OR is acutely aware that, when seeking an IPO, the Bankrupt is able to put their case to the Court..who may well decide in their favour?

However, the difficulty with an IPO [as distinct from an IPA] is that, should the [now Discharged?] Bankrupt's circumstances change, then the BAnkrupt has to apply to the Court for a variation in the amounts paid....rather than simply informing the OR, and seeking a variation, as with an IPA.

Of course, with an IPO..which is a binding Order of the Court ....if the BAnkrupt fails to pay, then the Court will take further action, which may result in an Attachment-of-Earnings.

longtermplanner

Muckers_Mate wrote: »

I spend around £30pd ( £480pm) on taxis fares. I've pointed out to to the OR that if they hold out on the payments until I've saved up enough, or at least something towards a car of my own, then my monthly travel expenses would probably be less, allowing me to make up for the difference later on.

Can't you come up with more definite figures? eg I will buy this car which costs £900 ie two months IPA. My expenses will then go up by £60 a month for insurance, £90 a month for petrol, £50 a month for road tax & servicing / repairs but will fall by £480 because of no taxis. So they will drop by £280 which I can then increase my IPA by. So in 4 months I will have repaid the 2 months IPA and the OR will start to make more money from you?

OTOH if the OR is allowing you your taxi fares, why not just carry on with this? You avoid all the hassle and risks of car ownership?

alastairq

OTOH if the OR is allowing you your taxi fares, why not just carry on with this? You avoid all the hassle and risks of car ownership?

.....................or, get the 'loan' of a car [you can be the registered keeper, which doesn't mean 'owner']......and take the running costs from the 'taxi fares?'