s333 Insovency Act - some clarification please?

beenieweenie

Hi, I am a 'newbie' to forums although I have done my fair share of scouring this forum for very much useful information. This would be the first time I have joined to ask a question so please bear with me!

I need some clarification on s333 about the duty to notify the Official Receiver about an increase in income. I currently have no IPA and I believe this is likely to stay this way. I have about 6 months left before discharge.

I am due a yearly pay rise at work but after speaking with the Tax Credits people they will in turn reduce my benefit amount. All in all I will be about £5 per month worse off than before any changes, although they cannot confirm this until the changes are actually made and they send an official letter.

My question is, if my income does not actually increase but some figures get altered (i.e. wages go up but benefits come down), do I need to notify the Official Receiver? I'd rather leave them alone!!!

I would think it would be best practice to let them know but the legal obligations surrounding this seem a bit vague to me.

Any comments welcomed. THank you

fermi

I don't ever recall seeing any conclusive legal definition, but on reading the quote the OR gives you from s333 which is all most people are likely to see unless they go digging, I think most people would fairly presume that in practical terms it is only net income increases. Just my take though.

beenieweenie

Hello Fermi thanks for such a quick answer.

I was revisiting the initial paperwork the official receiver has you sign and return at the beginning of the bankruptcy process. I interpreted it in the same way as you I'm just not always sure that I am right about these things. No one else to ask unfortunately.

alastairq

Gross or net, there will be a change of [financial] circumstances.

Wait until it actually happens.

Then inform the OR, within 21 days....[Did I say, spin it out?....tut tut ]

fermi

s333 of the act says.

there is an increase of the bankrupt’s income

Not change of circumstances. Financial or otherwise.

TheGardener

During my BR I only had a NT IPA and had a small 1% pay rise during that time. I informed the OR and they did absolutely nothing - I suspect that the change was so small it was uneconomical to make any change to my IPA and even if they had recalculated - I would probably have still been below the IPA threshold for my circumstances.
I would report the pay rise to the OR - within 21 days of actually happening as alastairq says and if they ask for another SOA then you will be able to show the drop in CT's as well.

fermi

Yes, there is no harm in a better safe than sorry approach, regardless of any legal definition or interpretation of that phrase from s333.

debt_doctor

Hi,


My thoughts (and I don't like my own thoughts here!) are that technically it would be any increase in income regardless of whether it was mitigated by any loss of benefit income.
For instance someone may have an IPA (based upon a mix of earned and benefit income) but the IPA is limited to the amount of earned income (even though a larger IPA could be sought if more of the overall income was earned income).
So if earned income went up and benefit income down (same net income) a higher IPA could be sought.


Just something to add to the mix.
DD

beenieweenie

Thank you all for your answers. I guess to be on the safe side I'll just report it, although it isn't incredibly clear that I should!

Debt Doctor, I am a little bit confused by your response. I'm afraid I'm not very savvy with these things!

TheGardener

beenieweenie wrote: »

Debt Doctor, I am a little bit confused by your response. I'm afraid I'm not very savvy with these things!

without wanting to butt in - I think DD means that: benefits are not taken in an IPA so if any changes mean your benefits form a smaller percentage of your overall income - then technically, the OR could increase an IPA from the part of your income that is not benefits. However, the OR has to decide if its economically viable to do the administration work required to change your IPA for the amount that might be gained - in your case it sounds like it probably wouldn't be in the ORs interest to make the changes. The OR rules are clear though that you should tell them about any change in circumstances, its up to them to decide if they do anything about it.

beenieweenie

Hi The Gardener

That makes sense, thanks for clearing that up.

I believe that all of my income is taken into consideration including any benefits. When I say benefits i mean tax credits, unsure if there is any difference in meaning. But I do not claim for anything that is negated by the rules (such as disability allowance, I believe).

However it helps to know that what I should do in any event has been cleared up. Once the changes are made I will let the official receiver know. Apart from anything else I wouldn't want to get into trouble! Thanks everyone