How much of any extra income should be paid to an IPA - ALL of it..?

silvercar

sortingmyshitout wrote: »

If it was just a year I'd be game for all of that, but my IPA is THREE years. I definitely thought when I entered into bankruptcy it would be one year, I'm sure that's what my research had told me, but no, my £250/month IPA is for 3 years, not 1 year :-(

Sorry, I was thinking you wanted to avoid an IPA from the start, as a new bankrupt. For people who manage to initially avoid an IPA, they only have one year to wait before their income is their own.

TheGardener

If I were in business - particularly if I was rebuilding that business and a new contract meant that the business had a much better chance of survival due to the investment in the business that the new contract would facilitate - I would be working on a business case I could present to the OR as part of the negotiation. In the business case I would be making a strong case for the re-investment of as much of the extra money as possible. Obviously the OR will want some of it - but if the investment meant that you could pay a slightly higher IPA over the remaining duration of the IPA rather than give up all of a lump sum - then with proper planning and a clear business plan - the OR might be willing to negotiate.

LincsPaul

Yes, as above I would seek to reinvest the money in the business so it doesn't show as much profit. Your personal income is the profit surely, not the actual income of the business. Win some new contracts and then spend the money on a nice new website, app, advertising or tools? How you run your company is your business and the OR shouldn't expect lots of money from a bankrupt self-employed person.

I'm surprised you signed an IPA personally since £250 a month isn't all the money in the world if you have your own business to run, and I'd have thought you could have used creative accounting practices to adjust your business income and expenditure to circa £100 profit a month (and then refuse to sign the IPA - they won't take you to court for that amount).

sortingmyshitout

LincsPaul wrote: »

I'm surprised you signed an IPA personally since £250 a month isn't all the money in the world if you have your own business to run, and I'd have thought you could have used creative accounting practices to adjust your business income and expenditure to circa £100 profit a month (and then refuse to sign the IPA - they won't take you to court for that amount).

I guess I should have read more, I didn't really think I had a choice in the matter. That being said, I wouldn't have wanted to use "creative" accounting practices in something that could have results in me having a BRO/BRU levied against me. I'd like to be discharged in 12 months, not x years!

My wife also earns very handsomly compared to myself, so I felt a bit like I was treading on eggshells and blindly agreed to most things, just happy that they weren't saying "hey, why don't you get your wife to pay off all of your pre-marital debts?"

My business expenditure costs to this point have been very low though. I work from home and run a website, so my only obvious overhead is the servers the site runs on.

Going forwards though, yes, I imagine I'll be putting a lot more money back into the site in various ways, promotion etc!

TheGardener

You can ask the OR to reassess your IAP at any time if you believe that there has been a change in your circumstances - no debt collector nor the OR could have asked your partner to pay your debts.
Once you have done maybe 3-6 months of your IPA - sit down and look again at that you are being asked to pay and double check that you are making the minimum contribution - an SOA on here might get you some advice on how to reduce the IPA.

sortingmyshitout

I assume an SOA can also be changed, not just one's income amount. Probably tough to *increase* the expenditure in an SOA though, I'm guessing?

TheGardener

sortingmyshitout wrote: »

I assume an SOA can also be changed, not just one's income amount. Probably tough to *increase* the expenditure in an SOA though, I'm guessing?

If you believe the SOA was not truly reflective of your overheads - then you can ask for a review. Did you say you were paying 50% of your domestic bills ? Peoples circumstances change for better and worse.

System

maxmycardagain wrote: »

i know someone on the cusp of going BR who is right now on benefits (UC) and there seems little incentive in finding a full time PAYE job only to have 3 years of working for (say) 10% of any excess income

Well if you don't look for work your unemployment benefit will be sanctioned. You'll lose 3 years of workplace pension contributions and many employers won't be interested in employing someone who hasn't worked for 3 years other than in really crappy jobs nobody else wants to do.

silvercar

Tarambor wrote: »

Well if you don't look for work your unemployment benefit will be sanctioned. You'll lose 3 years of workplace pension contributions and many employers won't be interested in employing someone who hasn't worked for 3 years other than in really crappy jobs nobody else wants to do.

If you don't have an IPA to start, you would only need 1 year (not 3) of looking for work before you could earn without risking an IPA.

I imagine that there are ways of looking for work that would keep yourself under the radar of benefit sanctions.

Your post does come over as disrespectful to those who do "jobs nobody else wants to do", without which the country wouldn't function.