OR interaction help please.

northwestv

Hi,
I am wondering if anyone can advise me please?

I was confirmed bankrupt on 12th August and have had my interview with the OR. Following the interview he told me a few things and has sent me letters which i don't completely understand or have heard before.

The first thing is that I have a car (BMW 1 series 67 plate) that I owe £15500 on HP. IT costs £204 per month on the agreement. The OR said that they will disclaim interest in the vehicle and that I should speak to the finance company (North ridge) regarding it.

I did that, the finance company seemed relaxed but it depended on the IPA the OR sets me. I relayed the information to the OR who then said he was having a rethink whether its a reasonable expense now.

I explained that I don't have the opportunity to save money to purchase a new car and that I need a car to go to work - I work in an industrial estate in the middle of nowhere, public transport isn't a realistic option. I have missed one payment (15th August) and do not have an agreement in place one way or the other on where I stand with the car.

The second one is that on the same call he asked me for a figure that I would voluntarily suggest paying as part of the IPA. I said i am not sure as i need to think about it. Realistically , debts aside i can only just cover my monthly costs with my current salary.

Yesterday I received a letter that explains an IPA has been set up for me to sign using the NT coding and the increase of salary (from not paying tax) would go to the creditors as well as the moneys i would have paid for council tax to form an IPA. The NT coding doesn't have have a date on it but the council tax one does - April 2020.

As a result of the latest letter i am not sure if that this is the IPA and they want me to commit to pay a figure or if its now part of the normal process.

Any advice or guidance is appreciated.
Thanks

TheGardener

Can't help with the car - it seems very unusual to allow a BR to keep a car with a high value and large monthly payments. Its also unusual for car finance to continue during BR but that's up to the finance company. You need to clarify that with them before you make any more payments.

NT means your employer will be notified that you are no longer paying tax - this 'extra' money will be paid to you - you must set it aside and the OR's agent will arrange to collect it from you. The NT code will end in April 2020 (end of financial year) and you will start to pay tax as normal from then. However, if you change jobs before then, the NT code will end and your new employer will deduct tax as normal.
The money that would have paid the council tax will be collected from you by the same agent as the tax - its usually a company called Clarke Willmot.

All this is normal. As for a 'surplus income' IPA - you don't volunteer a figure, the OR must decide based on your SoA whether there is a surplus they can claim for creditors.

northwestv

Thanks for reply The Gardener.

I too thought the car piece was unusual , I was genuinely surprised, albeit nothing is in writing or confirmed yet.

The letter doesn't state an end date to the tax payments but are you of the opinion that both (Income tax & Council Tax) will end at the end of the tax year and if so, does that mean i go back to paying tax as normal and the IPA ends or will i still have to pay it?

TheGardener

northwestv wrote: »

...The letter doesn't state an end date to the tax payments but are you of the opinion that both (Income tax & Council Tax) will end at the end of the tax year and if so, does that mean i go back to paying tax as normal and the IPA ends or will i still have to pay it?

Yes, they will only run until the end of the current financial year. After that you are liable for the new financial year Council tax and your employer will start to deduct tax as usual.
A surplus income IPA is very different - you will pay that for 3 years (36 payments from the date of the order being implemented) During that time, the IPA can be adjusted up or down depending on any change in your circumstances.

northwestv

Thanks again.

If I am understanding this correctly i could have 2 separate IPA's on the go.

One for the taxes and potentially a surplus one which will be what the OR determines i have remaining to pay my creditors. That being the case, the taxes one will end in April next year and the other, if it happens, would last 3 years?

TheGardener

northwestv wrote: »

Thanks again.

If I am understanding this correctly i could have 2 separate IPA's on the go.

One for the taxes and potentially a surplus one which will be what the OR determines i have remaining to pay my creditors. That being the case, the taxes one will end in April next year and the other, if it happens, would last 3 years?

Yes - Tax and council tax would end at the end of March 2020 and surplus income would run for 36 payments.

northwestv

Thanks TheGardener.

The car finance company seem happy to continue with the agreement but only when they know what the OR has decided on the surplus income IPA. I called the OR today to see if we could confirm the details with the car

The OR keeps asking me to come up with a voluntary figure to pay in addition of the Tax they are taking on an IPA and he did again today. I have consistently said that I don't know what to suggest as my current SOA doesn't give me any additional monies when everything is paid.

My current rent is £825 and is expensive for one person (signed in June when there was 2 adults and one child) but I am now committed until next June. The OR then asked how £50 per month sounds and that we can look to increase that figure to £100-£150 when and if I move house and the rent is lower. I would be looking to move but am concerned that my credit rating will effect getting a new home, the OR seemed to think that privately renting would be the way to go. I don't have any experience in that regard as i have always gone through an estate agent.

I feel uncomfortable with having to come up with a figure myself and don't particularly want, if I can help it, to be speaking to the OR again in 10 months time. Is it normal to keep dialogue with the OR during the first 12 months? Do they keep checking your bank and SOA whilst you are in the 12 months of bankruptcy and 36 month IPA?

Any advice is appreciated please.

TheGardener

northwestv wrote: »

…...The OR keeps asking me to come up with a voluntary figure to pay in addition of the Tax they are taking on an IPA and he did again today.

No - you need to provide a well thought out SoA and its up to the OR to make that decision. Do you want to post an SOA here so we can help? The OR is trying to get you to volunteer an amount which is more akin to the tactics used by debt collectors ?

This one is a good one to post on here http://www.stoozing.com/calculator/soa.php

Once a surplus IPA is set you are pretty much tied for 3 years so don't volunteer an amount. Sound like the OR is hoping for a surplus when you move BUT that's not going to be until after the 12 month anniversary of your BR - at which point they can't set one up - it has to be done before you are discharged. I may be being disingenuous to the OR but sounds like that to me...

northwestv

The below includes everything i can think of except the monthly car cost which is £204.

Reading these forums there seems a lot i haven't put in that I possibly could- Holiday fund, emergency fund, entertainment etc. That being said, the OR hasn't gone through income and expenditure in any real detail with me.

The bankruptcy application form shows (income and expenditure) as £2044 in and £2145 out.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 2044
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2044

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 825
Management charge (leasehold property).. 0
Council tax............................. 154
Electricity............................. 65
Gas..................................... 65
Oil..................................... 0
Water rates............................. 45
Telephone (land line)................... 19
Mobile phone............................ 25
TV Licence.............................. 12
Satellite/Cable TV...................... 45
Internet Services....................... 35
Groceries etc. ......................... 235
Clothing................................ 20
Petrol/diesel........................... 80
Road tax................................ 12
Car Insurance........................... 71
Car maintenance (including MOT)......... 40
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 75
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 12
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 30
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1885


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-


Monthly Budget Summary
Total monthly income.................... 2,044
Expenses (including HP & secured debts). 1,885
Available for debt repayments........... 159
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 159

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -0
Net Assets.............................. 0

TheGardener

The car costs should mean you have no identified 'surplus' for an IPA. In fact you need to be sure you can afford the car?
I've PM'ed you with some other suggestions but given the size of the rent, I don't see how the OR can ask for an IPA.

northwestv

The car is a surprise that I thought i would lose outright but now find myself in a position where I could keep it and if not i do not have the opportunity to save for one which puts me in a difficult position as public transport isn't a realistic option.
I will check PM now.
Thank you