Debt Relief Order and Lump Sum (Bonus)
Underchipped
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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
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
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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
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.
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
They’re received annually based on both business and personal performance, but not guaranteed - certainly not quarterly either.
Thanks,
UC