Shocked with income payment agreement

banksy123

Hi all. I was made bankrupt last month and finally had a meeting with the OR last week.

It was far less painful than I had imagined and I left feeling that this was a chance for a fresh start, despite the bankruptcy hanging over me.

I got home today and found a letter from the OR with the income payment agreement.

They are asking for £714 a month, for the next 36 months!

Since my debt struggles, which amounted to £45,000 I have cut back as much as possible.

£714 has been classed as my montly disposable income although it is actually less and they are demanding 100% of this.

It's left me in complete shock and I'm struggling to see how I will manage to pay this amount or ever get out of this financial hole I've now gotten into.

I have just written the OR a letter asking for a review of these payment terms so hopefully the amounts can be dropped. Is this something that could happen?
I'm already seeing the next 3 years as being a daily struggle

fermi

Yes, you can demand the breakdown of how the calculated it.

If you disagree with their calculations by thinking they are unreasonable. then you can refuse to agree/sign the IPA.

The OR would then either have

(1) to revise the figures they want, or

(2) apply to the court for an order for the original amount.

If the amount is truly unreasonable, then the OR would not want to try (2) as very likely a court would refuse it or set a lower amount.

If you don't think the IPA the OR wants is fair, then stick yo your guns and refuse to sign.

mwarby

Do you recall what amounts you ask for/agreed on for your expenditure ? maybe it's worth reviewing them again

banksy123

Thank you Fermi.

I suppose I will have to see what they say when they receive my letter, but paying that amount seems impossible and would only lead to much more financial trouble.
Hopefully they will see this, but as you've said I will refuse to sign it for now and hopefully they will come back with a more reasonable amount.

debt_doctor

The Insolvency Service get ever more unreasonable almost week by week as they turn from fair and reasonable in to government revenue collectors.
Turning down ridiculous IPAs has become a frequent event in our office - and not one court action yet.
Last month we had one where a non bankrupt partner was disallowed from paying their own personal contractual debt repayments......
Battle on - and it would be useful for you to post up the figures.
DD

stundent

Hi debt doctor,

Sorry for jumping in the thread, but how did the that one where a non bankrupt was fiscal owed there contractual payment pan out?
I may be in the same position.

My wife income is 668 per month plus benefits.

Her debt including hp for a car come to 500 per month

stundent

Banksy could you post and soa so we could see where the or got that figure from

fermi

debt_doctor wrote: »

Last month we had one where a non bankrupt partner was disallowed from paying their own personal contractual debt repayments......

That would be funny if it was not so horrendously unreasonable and unlawful on the part of the OR.

Thankfully the OR simply cannot make that one stick in any legal way.

debt_doctor

stundent wrote: »

Hi debt doctor,

Sorry for jumping in the thread, but how did the that one where a non bankrupt was fiscal owed there contractual payment pan out?
I may be in the same position.

My wife income is 668 per month plus benefits.

Her debt including hp for a car come to 500 per month

We told the examiner that that it was wholly unacceptable that a non bankrupt partner should be forced in to insolvency by the imposition of an unfair and unlawful IPA, and that we would be happy to defend any such application to the Court.
The reaction was one that is becoming quite typical; they still pushed it after our contact and then quietly dropped it without further contact or explanation.
I have noticed that the IS are increasingly reluctant to detail their calculations or provide a copy.
DD

debt_doctor

fermi wrote: »

That would be funny if it was not so horrendously unreasonable and unlawful on the part of the OR.

Thankfully the OR simply cannot make that one stick in any legal way.

I would certainly hope not!, but currently they will try anything to get their case management fee paid.
DD

lilybankrupt

Just to separate out the two things from the original post....

The OR will take 100% of surplus income, that's standard :mad:

The issue for you is whether the amount they have given is actually surplus, taking into account 'reasonable living costs'. This is the bit you can contest - the amount you need for daily living.

As others have said, post the income / expenditure you submitted to the OR and peeps can advise.