Letter to creditors IPA

Scooby99

In the letter to creditors by my OR it says no meeting will be held and there is no realistic prospect of a distribution of funds. Does this mean I won't be getting an IPA?

debt_doctor

Hi,
Unless the letter says otherwise elsewhere, then no it does not guarantee that you will be IPA free.
Most 'low pay amount' IPA's do not ever generate funds to go to creditors - but they DO generate funds to pay for insolvency service and secretary of state fees. These fees always get paid before creditors receive anything.
IPA's (especially since 2010) are designed to pay government fees not creditors.
If there is no IPA or any other assets then these fees go unpaid.
DD

Scooby99

Thanks it also says 'creditors will not be asked to submit a proof of debt form as a matter of course.' I am disabled with greatly fluctuating health conditons. As a consequence my mobility and care needs change frequently so its very difficult to estimate my expenditure. This is why its difficult to predict if I will get an IPA

debt_doctor

Hi,
I seem to remember that your only other income apart from benefits is an 'income protection insurance' - is that correct?
Could you explain what this is ?


DD

Scooby99

Income Protection Insurance or Permanent Health Insurance covers insurance against getting a long term illness that prevents you from working. My employer paid the premiums when I was working so now I get 50% of what my wage would be each month minus any ESA payment.

I rang the OR office yesterday and was told a decision has not been made on IPA yet.

I presume it will not be more than about £8000 over the 36 months if there is not going to be any money left for creditors.

debt_doctor

Interesting (from an IPA point of view)


How long will this be paid for?
DD

debt_doctor

31.7.54 Payments received post bankruptcy in respect of loss of earnings to be included in an IPA/IPO
Periodic payments in respect of loss of earnings remain subject to the IPA/IPO provisions of the insolvency legislation and should be included in an IPA/IPO calculation. Any wages received whilst an individual works out a notice period, holiday pay or arrears of wages should also be included in an IPA/IPO calculation.


So it would appear that an IPA against this income could be claimed - still obviously subject to your reasonable domestic needs being met, which certainly includes any disability needs.
DD

Scooby99

The Income Protection Insurance payments are paid to me monthly until I am 65. Yes it can definitely count towards IPA payments if I am classed as having surplus income.