Still Awake & worrying about IPA

Flora_McDora

I’m still awake at 3am worrying about having a IPA when I declare bankruptcy !!
My son will go to uni in Sept and as a result my Universal Credit, Child Benefit & Child Maintenance  will reduce dramatically as I will only have my daughter at home. I know some of my outgoings will reduce but I will be financially much worse off.
So if I start with an IPA, it will have to be stopped/suspended in Sept. After my 12 months of bankruptcy can they review my income/exp again to see if they should reinstate an IPA if I eventually manage to get a higher paid job etc?
Am I over-thinking this too much??
Worried Flora x

mwarby

Looking at the SOA you had £3 left between income and expenses (and I doubt they will setup an IPA to recover about £100 over 3 years), that's before your pet insurance went up, which leaves you £-13 which wouldn't get you an IPA anyway. It's also worth considering expenses in a new job, if you need to travel further, if you need more childcare etc all this can offset the additional income to an extent

Also consider the alteraltives a DMP on £3 a month wouldn't work, neither would an IVA, a DRO isn't an option, so your left with bankruptcy or continuing as your are no doubt being chased by creditors.

Let's say in the worst case you get an IPA and then you get a decent job. After a maximum of 3 years (clock starts when your bankrupt, an IPA wouldn't start early on with your SOA, so probably 2.5 years) you are free of all your debts and you get to keep all the money from your new job. During those 3 years you are left with enough money to live a reasonable standard of living

The OR isn't going to force you into a higher paid job, and also can't force you to work additional hours. If you really want to avoid an IPA, you could either ensure your hours are low enough or not move into a job with better wage. Of course you need to consider the long term effects of this on career etc.

mwarby

Once you agree to an IPA based off your normal income (not tax\council tax related one off income for first year) that IPA stays until 3 years after you were made bankrupt. That IPA would be reviewed after every change of circumstances (you need to keep them informed of income changes), the IPA can be set to £0(although not setup at £0), but if income goes up again the IPA can go up with it(but also if your cost of living goes up that's taken into account)

Minkym00

It’s worth adding here that an IPA can *only* be set up during your 12-months of bankruptcy. Once you’re discharged then you’re home and dry and can keep any future additional income. 

Flora_McDora

Minkym00 said:

It’s worth adding here that an IPA can *only* be set up during your 12-months of bankruptcy. Once you’re discharged then you’re home and dry and can keep any future additional income. 

So if I started with an IPA In June & it was reduced to nil when my son goes to uni in Sept then after the following June (after my 12 months) it can’t be re-instated if something changes?
Thanks Fx

mwarby

If it started in June 2020 it would last until 3 years from day you went bankrupt. If you went bankrupt today it would end May 2023

Minkym00

Flora_McDora said:

Minkym00 said:

It’s worth adding here that an IPA can *only* be set up during your 12-months of bankruptcy. Once you’re discharged then you’re home and dry and can keep any future additional income. 

So if I started with an IPA In June & it was reduced to nil when my son goes to uni in Sept then after the following June (after my 12 months) it can’t be re-instated if something changes?
Thanks Fx

Yes. It’s a legally binding agreement that last for 3 years. Once it starts it can be varied to nil, but can also be varied up again within that 3 years.

jayzor

You can probably hold them off till September anyway. Also, if you refuse to sign there is probably only a slim chance they will apply for an IPO if the amount they can get is small. If you are willing to take your chance. Even if they did apply for an IPO you can then choose to accept the IPA that’s on the table.

Flora_McDora

I did wonder about holding off applying for bankruptcy until Sept when my son goes to Uni as I’ll have no chance of an IPA then. 

mwarby

The chances of you getting an IPA are fairly slim. 

If you tell the OR of the changes and refuse the IPA, what’s the chances of the OR going to court to setup an IPO which may only get one or two payments (you’ll be behind a lot of other court cases) and the court agreeing ? I’d say fairly slim

I doubt anyone can tell you the risk of getting an IPA/IPO is nill, but from what we can tell it’s unlikely. You need to balance that chance against the benefits of getting the bankruptcy out of the way earlier (one being, that if no IPA/IPO you can get a better job in 12 months from now, not from September)