Missing IPA payments

simplesibbo

Hi all,

Does anyone have any experience of or know what would happen if a discharged bankrupt missed two months of IPA payments without permission? A friend of mine emailed the collection law firm and asked for two months grace and offered to add it onto the end of the payment period - he's received no reply after two weeks, but is thinking of skipping the payments anyway (with the intention of adding them on the end later) to have some money over Christmas etc. Does anyone know what the likely outcome of such an action might be...?

Many thanks

Richard_S

simplesibbo wrote: »

Hi all,

Does anyone have any experience of or know what would happen if a discharged bankrupt missed two months of IPA payments without permission? A friend of mine emailed the collection law firm and asked for two months grace and offered to add it onto the end of the payment period - he's received no reply after two weeks, but is thinking of skipping the payments anyway (with the intention of adding them on the end later) to have some money over Christmas etc. Does anyone know what the likely outcome of such an action might be...?

Many thanks

Hi ss,

An IPA is a legally binding document and failure to pay without good reason is not taken lightly. Your friend has done the right thing by contacting his/her trustee and providing he can prove that he's made contact then his trustee would negotiate a payment schedule to recover the arrears.

It's quite possible that the trustee has been too busy to return any correspondence but your friend really should be able to prove that he's tried to make contact.

I believe that failure to meet the obligations of an IPA, without good reason, can result in an IPO, and failure to pay that is treated as contempt of court. I'm not 100% certain of that, but I think if you read the relevant regulations you'll find that to be the case.

Stay in touch and negotiate is the best way to approach the situation.

Regards

Richard

wherediditallgo

I agree with Richard. Although an IPA is an agreement & not a court order, it is legally binding. If they haven't heard from the trustee after two weeks, they should ring or fax them & ask them to confirm in writing whether it's OK to miss the payments. There could be very good reasons why they haven't replied (eg problems with their e-mail setup), but if your friend hasn't used every possible means to get consent & just misses the payments (especially as it's not just one payment), they could be in trouble further down the line.

My trustee told me that the system is set up so that the OR can log in at any point to see how payments are being paid, as they show on the system within a few hours. An OR who isn't aware that they've asked to miss payments would probably take quite a dim view of seeing they hadn't paid anything for two months. As well as contacting the trustee, it would be wise for your friend to also contact the OR about it. If the trustee has to get consent from the OR, maybe the OR can give permission direct to your friend & let the trustee know for them. They've done the right thing trying to get permission, but I really don't think it's a good idea to just miss the payments anyway without getting something in writing allowing them to do so. This page on the Insolvency Service site says that "if you don't make the agreed payments, then your trustee may apply to the court for an order suspending your discharge from bankruptcy. This means that you would be subject to the restrictions of a bankruptcy order for longer. Your trustee can also ask for money to be taken directly from your wages to make the agreed payments, or take other legal action to recover the unpaid amounts". It's not a risk I'd be prepared to take.

Richard_S

Hi wdiag,

Failure to pay an IPA, without good reason, will result in an IPO and that is a Court Order. I've no personal experience but the regulations are quite clear. As with anything to do with the Courts you are given every opportunity to address the situation, but just ignoring lapsed payments under and IPA is likely to result in problems.

Richard

wherediditallgo

Richard_S wrote: »

Hi wdiag,

Failure to pay an IPA, without good reason, will result in an IPO and that is a Court Order. I've no personal experience but the regulations are quite clear. As with anything to do with the Courts you are given every opportunity to address the situation, but just ignoring lapsed payments under and IPA is likely to result in problems.

Richard

Totally agree. The IPA is a voluntary agreement between you & the OR, but the IPO is a court order & isn't to be messed with. Christmas or no Christmas, if I'd asked to miss some payments & catch up later, & hadn't heard from the trustee before the payments were due, I'd pay the money rather than face a major headache later.

Richard_S

Hi wdiag,

If the OP's friend has a valid reason for missing a couple of payments and makes a reasonable proposal to repay them I don't think he/she would have much of a problem, which I guess is what the Thread was all about; what do you think?

Richard

wherediditallgo

Depending on the OR or trustee involved, they might have no problem with it or they might think that they knew Christmas would be coming & should have budgeted for it. It's not like asking to miss payments because you've had a burst pipe & needed to pay for an emergency plumber. The bit that could get right up their noses is if they don't make every effort to get permission & just miss the payments. That could come across as them thinking they could get away with presenting the trustee/OR with a fait accompli, & I can't see that going down too well.

simplesibbo

The OR said yes - no problem, have a happy Christmas. I shall do!

nomoneyprobs

Thats brilliant news....

happy christmas to you too

Ian