Bankruptcy scares the life out of us

Posthinking

Rog, surely changes in income have to be reported if in an IPA. What if income ceased?

rog2

Posthinking wrote: »

Rog, surely changes in income have to be reported if in an IPA. What if income ceased?

I'm not sure what would happen if income ceased, PT. All I know is that once discharged you no longer need to report any changes in income or circumstances to the OR.
I would assume that, if your income ceased, you would need to inform them, as you would no longer be able to make the payments - perhaps someone can clarify this?

Posthinking

No disrespect rog but you're wrong. Whilst in an IPA you must notify the OR or trustee of any changes even after discharge. The IPA can be adjusted upwards or downwards depending on income (and expenditure).

rog2

Posthinking wrote: »

No disrespect rog but you're wrong. Whilst in an IPA you must notify the OR or trustee of any changes even after discharge. The IPA can be adjusted upwards or downwards depending on income (and expenditure).

If I am wrong, I apologise. My information is based on a post by addicted2chocolate, who actually works for the Insolvency Service. I know that there was a lot of debate about it, and the post can be seen here:

http://forums.moneysavingexpert.com/showthread.html?p=4958440

I appreciate that the thread that I refer to was inconclusive, and I have just spent an hour on the Insolvency Service website trying to clarify the situation. It does seem a bit ambiguous and I think that whilst the OR could enforce notification of changes after discharge, few, if any actually do.
One thing I have been able to establish, though, is that any IPA/IPO must be in place BEFORE discharge. If you have no IPA/IPO at your date of discharge, none can be applied afterwards - irrespective of changes in income/circumstances.

There are, also, provisions for suspension in the case that your income ceases.

Kj123_2

scaredwitless32 wrote: »

Thanks again, and when it happens I shall keep you informed of how things go.......and no doubt I will need to ask yet more questions, and Im sure you will be sick of the sight of me in no time at all.
Just the fact that I have posted here on the forum, has given me a 'lift', does that sound stupid? Well it did and Im very grateful

Does not sound stupid at all, that 'lift' as you call it is all about sharing your problems with others. I don't and never have worked for BT but they used to say in their adverts that it's good to talk (or type in this case).

There are lots of experienced and helpfull people here who will gladly help point you in the right direction with any questions you have.

wherediditallgo

I queried the issue of increases in income during an IPA here.

Having spoken to others since then, I've come to the conclusion that, although someone could take the agreement by the written word & not report increases in income once discharged, a certain element of common sense rather than ability to play with words should also prevail. An IPA is based on the amount of surplus income the OR deems that you have, so if the IPA is in place for 3 years, it's natural to expect to have to tell the OR if your income goes up or down. An increase in income after discharge of £10pw is unlikely to be an issue because unless you're right at the border between one IPA level & another, or between no IPA & getting one, it's not going to be make enough difference to your finances to change that. However, a large inheritance or lottery win would.

It would require nerves of steel not to report the increased income & challenge any OR's concern if they subsequently found out about it on the basis of the agreement itself, since you know or should know that an IPA can be increased or decreased according to your circumstances. Not informing the OR of your improved financial circumstances (whether you see it as actual income or not) could be seen as an intention to mislead if not actually defraud, & if the OR decided to take the matter through the courts you could lose a sizeable chunk of the money anyway in legal fees. I personally think it would be very difficult for someone on a £50pm IPA to say they didn't inform the OR of a £200k windfall because of the paragraph on the agreement. I wouldn't even try.

rog2

Thanks wd - it is very confusing - I would read, from your contract, that you were under no obligation to report any changes once you were discharged. I spent over an hour trawling through the Insolvency Service website to try and clarify this point, but ended up seeing both answers - 'yes you must declare' and 'no there is no requirement to declare'.
I think, therefore, that it is better to err on the safe side and declare any changes.
I apologise if my earlier post was misleading - it was written in good faith.
Perhaps there is someone who has been discharged for over a year, who could clarify what they do.

scootw1

I wondered about this repoting of income as well. When I asked the OR they siad that I only have to tell them about changes in income if I can't afford the IPA payments any more which indiactes to me that if you have a payrise they don't need to know. maybe it's different in other cases but that's how it is with me.

fermi

This will either clear it up, or confuse it further.:p

http://www.debtquestions.co.uk/debt_forum/viewtopic.php?p=149507#149507

Richard_S

My understanding is that if you're in an IPA and your income drops then you have every right to contact the O.R and the IPA will either be reduced or suspended depending on the level of the fall in income. In practice, nobody is very likely to report an increase in income unless it's significant.

This is based on a conversation I had some time ago with our O.R and I have seen the same guidelines somewhere else, but can't remember where.

Richard