Debt Relief Order and Lump Sum (Bonus)

Underchipped

I am unsure of the rules here and would appreciate if someone could offer a little clarity.

When working out income and expenditure, after tax amounts are used.
Does this apply to a one off lump sum, such as a bonus. So, if I received a £1150 bonus (over the £1000 limit), but the after tax amount was approximately £800 - would it therefore fall underneath the £1000 threshold ?

The quantifiable amount is obviously over £1000, however the actual amount received would be less than £1000.

I don't want to get caught short on the wrong side of the regulations.
Thanks,
UC

fatbelly

It would be the actual amount received

Underchipped

Hi fatbelly,

I appreciate the response. Are you able to cite the source for this information. I don't doubt what you've said, but haven't been able to find this stuff in the legislation or insolvency practioner guide.

Thanks,

UC

fatbelly

Lump sum protocol in the DRO a-z

Lump sum protocol
 
This applies where a debtor receives a lump sum during the moratorium period after a DRO has been made.
 
Where a lump sum is received and the value of the debtor’s total property (including the lump sum) does not exceed £1,000 no action will be taken.  
 
Where a lump sum is received and the value of the debtor’s total property (including the lump sum) is between £1,000 and £1,990 the Official Receiver will consider the circumstances of the case and may not revoke the DRO.
 
Where a lump sum is received and the value of the debtor’s total property (including the lump sum) exceeds £1,990 the Official Receiver will consider the circumstances of the case but it is likely the DRO will be revoked.
 
Where a DRO is revoked and the debtor remains insolvent the debtor can use the lump sum to enter a different insolvency remedy e.g. bankruptcy/ IVA. 

Underchipped

Hi fatbelly,

That's great - much appreciated. Given that I received approximately £800 in my April 2021 wage amount, should this be used when working out the monthly income and expenditure - or should the next bonus (should there be one), be declared according to the lump sum protocol.

I have heard conflicting information on this.

Thanks,

UC 

fatbelly

Are your bonuses received regularly, say every three months?

Underchipped

Hi fatbelly,

They’re received annually based on both business and personal performance, but not guaranteed - certainly not quarterly either.

Thanks,

UC