Timeframes

JanChris

I am a bit confused about these timeframes....

1: You go to your bankruptcy hearing and all goes well and you are declared bankrupt.... and possibly told to pay £XX per month to the official receiver for the next 3 years which is split between your creditors. You are now an 'undischarged bankrupt' for the next 12 months.

2. At the end of 12 months you are a 'discharged bankrupt' and your debts are 'wiped out'.

2. For the next 2 years you are still paying the £XX to the OR which he is splitting between your creditors.

Is this correct?? Why are you paying for the next two years if they are 'wiped out'?

fermi

They are not 'wiped' out. They continue to exist as a debt in the estate.

You are discharged from the liability to your creditors directly, but the law says that if an IPA/O is in place then you have an obligation to pay surplus income to the OR which is part of the bankruptcy estate, and is used to pay the fees of that estate, and any remainder distributed as a dividend to any of it's creditors.

The binding agreement or obligation to pay into the estate under an IPA/0 is a separate one to the original debts, so the discharge from the original debts has no effect on that, and the bankruptcy estate it is paid into also continues to exist after discharge.

alastairq

To add to Fermi's excellent explanation.....the 3 years that an IPA/IPO may run, dates from the commencement of the IPA, not the date of petition.

The IPA is an agreement, between the OR and the bankrupt.....not something that is imposed.
If a surplus of income is identified, then the amount agreed in the IPA can be varied if the bankrupt's financial circumstances change during the 3 year term.