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Income payment agreement 

How can it be 'fair' to force those employed to go onto an IPA and be stuck with it around the neck for three long years, compared with someone who isn't employed for one year? So in theory a person could benefit by not working for a year and escape the IPA?

I've have a very unstable year for say the least but I am again employed in last week, full time. My IPA looks like it won't be starting until at least late December as IR waits for wages to come through. Basically I could be tied into an IPA until beginning of 2026 if I agree to one in coming weeks/months. 

Is it worth working? Should I just maybe work really hard and earn as much money as I can before end of November and then aim to find a way to leave work and go back to unemployment/benefits? 
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  • Sonic101
    Sonic101 Posts: 151 Forumite
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    Hi there 

    I believe the rules are that if you have no IPA set before the end of your bankruptcy one can never be set, but if you have an IPA set,
    you have to go on reporting and changes for the three years it lasts and it can be stopped/started/reduced/increased if your income decreases or increases.

    I agree it seems unfair - if you don’t get one you don’t pay anything but if you are deemed to have more than £20 disposal income per month you have to pay/keep reporting your circumstances for three years. 

    I’m not very knowledgable on this, I’m only going by what I’ve read and what an acquaintance who’s been through bankruptcy has told me, but there are some knowledgeable people here who may be able to give you a better answer. 

    In the meantime have you tried talking to one of the debt charities such as National Debtlline or StepChange about this?
  • MEM62
    MEM62 Posts: 4,830 Forumite
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    It is probably fair from the viewpoint of the people that you owe money to in that, if you can afford to, you make a contribution towards what you owe them.  The fact that some individuals might be in a position to not work and don't in order to avoid making a contribution is probably where the question around fairness might be debated.       

    The issue is that the system, which collects something from those that can afford it and does not from those that cannot, can be manipulated.     
  • stanger66
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    Personally I don't mind paying my IPA £90 a month still better then then baliff and threatening letters 
  • Bluecar2
    Bluecar2 Posts: 83 Forumite
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    I personally took the route to cut my hours to part time for the duration of my bankruptcy to avoid an IPA, I know this will divide opinion amongst members on here but i sought advice and there was nothing they could do to prevent me doing this, as soon as my bankruptcy was finished i went back to full time
  • DataMat
    DataMat Posts: 10 Forumite
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    Bluecar2 said:
    I personally took the route to cut my hours to part time for the duration of my bankruptcy to avoid an IPA, I know this will divide opinion amongst members on here but i sought advice and there was nothing they could do to prevent me doing this, as soon as my bankruptcy was finished i went back to full time
    That's not always realistic though. I cannot have the option of part time work where I am currently employed for example. And because the rules for an IPA state anything over 20 pounds is reason to attract an IPA/IPO it's probably the case I cannot avoid having to do it. I believe that the rules need to surely change to make it fairer for everyone. The IPA/IPO should be allowed to be enforced for anytime during the 3 years starting on the day of bankruptcy irrespective of employment status or full benefits.

    Why for example couldn't a person claiming full benefits not pay a few pence to satisfy an IPA?
    I get that IPA is a morally right thing in terms of paying for mistakes that lead to bank-ruptcy but I feel quite annoyed that its actually possible to spend a year not working to then be totally off the hook so to speak, after a year. I believe it would be the fair thing that everyone pays something and have the same rules, like the 3-year thing.

    It surely as currently set up, discourages working.

    I'm pretty sure I'll see huge amounts of my income taken by OR. I'm still over a month away from any IPA proposal coming to me because the OR said need to wait a month for wages to come for a full month. That means if I sign it, I'd be having this to deal with until the beginning of 2026, and late summer 2025 seemed quite a long haul. I was made bankrupt officially 1st August 2022.


  • DataMat
    DataMat Posts: 10 Forumite
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    MEM62 said:
    It is probably fair from the viewpoint of the people that you owe money to in that, if you can afford to, you make a contribution towards what you owe them.  The fact that some individuals might be in a position to not work and don't in order to avoid making a contribution is probably where the question around fairness might be debated.       

    The issue is that the system, which collects something from those that can afford it and does not from those that cannot, can be manipulated.     
    But its surely is super easy fix? Why would they allow even the possibility of that manipulation? 2 years is a long time and I am looking at this rule and actually thinking, do I just leave my job and just see if I can spend the next 8 months out of work? I'll end up stress relieved in theory compared to working hard and seeing all my earned money that was made through hard work constantly vanishing for a whole 24 months after the bankruptcy technically ended. How can that be fair?
  • MEM62
    MEM62 Posts: 4,830 Forumite
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    edited 26 October 2022 at 10:13AM
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    DataMat said:
    MEM62 said:
    It is probably fair from the viewpoint of the people that you owe money to in that, if you can afford to, you make a contribution towards what you owe them.  The fact that some individuals might be in a position to not work and don't in order to avoid making a contribution is probably where the question around fairness might be debated.       

    The issue is that the system, which collects something from those that can afford it and does not from those that cannot, can be manipulated.     
    But its surely is super easy fix? Why would they allow even the possibility of that manipulation? 2 years is a long time and I am looking at this rule and actually thinking, do I just leave my job and just see if I can spend the next 8 months out of work? I'll end up stress relieved in theory compared to working hard and seeing all my earned money that was made through hard work constantly vanishing for a whole 24 months after the bankruptcy technically ended. How can that be fair?
    I guess it might be easy to fix.  However, if the number of people that manipulate the system is limited, perhaps the problems is not sufficiently large that there is the motivation to do so. 

    And your money is not 'vanishing'.  It is making a contribution towards those that you owed money to.  Most would not struggle to see that as fair.    
  • luvchocolate
    luvchocolate Posts: 3,281 Forumite
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    Some people take time from work to study during the first year 
  • stanger66
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    DataMat said:
    MEM62 said:
    It is probably fair from the viewpoint of the people that you owe money to in that, if you can afford to, you make a contribution towards what you owe them.  The fact that some individuals might be in a position to not work and don't in order to avoid making a contribution is probably where the question around fairness might be debated.       

    The issue is that the system, which collects something from those that can afford it and does not from those that cannot, can be manipulated.     
    But its surely is super easy fix? Why would they allow even the possibility of that manipulation? 2 years is a long time and I am looking at this rule and actually thinking, do I just leave my job and just see if I can spend the next 8 months out of work? I'll end up stress relieved in theory compared to working hard and seeing all my earned money that was made through hard work constantly vanishing for a whole 24 months after the bankruptcy technically ended. How can that be fair?
    Look at it another way we lost somebody elses money going bankrupt? How can that be fair ? Just have to suck it up and get on with life.
  • TinyPomegranate
    TinyPomegranate Posts: 89 Forumite
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    edited 27 October 2022 at 8:41AM
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    You're also forgetting the sheer length of time it takes to claim benefits in the first place. And that someone previously working enough to want to protect their wage by avoiding an IPA leaving their job for no explainable reason, would not find the claiming process an easy or quick ride.
    And your "earned money that was made through hard work" doesn't vanish. You've already spent it, you'd be paying it back.
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