Bankruptcy -IPA scotland

RST_78

So when I was made bankrupt in Scotland over 3 years ago, a voluntary payment plan was set up to pay 120 per month for 3 years. I was told that this was subject to change as it was based on my earnings at the time of bankruptcy, so I took this if I earned more, I'd pay more and vice versa...

During my 3rd year, my earnings dropped as I went part time and it was agreed that I pay only £60 per month. Now the 3 years have passed (February '14) I assumed payments would stop but they are requesting remainder of amount to still be paid based on 36months @ £120. Can they still request monthly payments after 3 years? I thought it was a variable amount based on earnings over 3 years?

Thanks

fermi

Who is the "they" that is demanding this?

I'll try to get someone more familiar with IPAs in Scotland to take a look.

RST_78

Thanks. They are my creditors(?) BDO, a Glasgow based firm...

fermi

Well, as far as I can see if you and the trustee agreed to vary the IPA agreement, then the new payment amounts agreed are the only ones that you are legally obliged to make. So I suppose depends how legal this variation was and if you can hold them to it.

That I'm not sure I know enough about the Scottish side of the law on this to comment on. Others may know though and hopefully can comment sometime soon.

In the meantime I would contact places such as National Debtline etc and perhaps try for some free legal advice. May or may not know enough to help, but got to be worth trying.

coolcait

Hi RST_78

A couple of questions for you first.

When your trustee (BDO) agreed to a reduced amount each month, did you get that agreement in writing?

Have you had anything from them in writing, chasing you for the 'remainder', or has it just been over the phone?

If it's in writing, can you let us know what they're saying? Specifically, if they refer to the Bankruptcy (Scotland) Act 1985, can you type up exactly what it says in the letter?

Income Payment Agreements (IPAs) should be straighforward and clear cut. They should end no later than 3 years after the date on which the Agreement is made.

If your trustee wasn't happy with the reduced amount you were paying, then he had the option to go to court to get an order to make you pay. He didn't do that.

Sometimes the 'straightforward' part gets blurred, because there is an informal agreement between the person and the trustee that missed payments can be 'made up' at the end of the IPA. I won't comment on whether or not this *should' happen, but there is anecdotal evidence that it does.

However, in your case, this doesn't apply.

I suspect that BDO may be getting mixed up with what can happen with contributions in a protected trust deed (PTD) - where the PTD can be extended until the agreed amount of contributions has been paid.

It will be interesting to hear what they have actually said to you. For now, my understanding of the Bankruptcy (Scotland) Act is that the three years have ended, so has the IPA.