CSA & Bankruptcy

pinksteviegirl

Hi

I was having an interesting conversation the otherday and wondered if someone knew the answer......

I'm not trying to get out of paying what I want to pay and I went BR 18months ago so it doesn't apply to me directly but......

Someone was telling me that if you go BR and you are making CSA payments then you have to tell the CSA and something happens to your payments??

Has this or something similar happened to someone else - its been niggling me for days now.

fermi

As far as I am aware the obligation to continue making the assessed payments is not changed by the bankruptcy. Not even if a Income Payments Agreement/Order is made by the OR, since the maintenance payments should be taken into account.

http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch25-36/Chapter31/part7/part2/part_2.htm#32

31.7.32 Maintenance payments

An obligation arising under an order made in family proceedings or under a maintenance assessment made under the Child Support Act 1991 is not a debt provable in bankruptcy [note 15]. It is a continuing obligation, payable out of income.
Where a bankrupt continues to receive income after the bankruptcy order has been made, the official receiver or trustee in bankruptcy may consider an IPA under section 310A of the Insolvency Act 1986 for the benefit of the bankrupt's estate. When making an IPA/IPO assessment the official receiver or trustee must consider the provisions of section 310(2) [note 16]. For further information regarding reasonable domestic needs see also paragraph 31.7.4 .

Section 310(2) expressly prohibits a court from making an IPO which would have the effect of reducing the bankrupt’s income below that which appears to the court to be necessary for meeting the reasonable domestic needs of the bankrupt and his family. The term "family" is restrictively defined for this purpose in section 385(1) of the Insolvency Act 1986 as meaning the persons (if any) who are living with the bankrupt and are dependent on him (or her).

In practice, a spouse/civil partner/partner or former spouse/civil partner/partner may be in receipt of a maintenance order, but not living with the bankrupt, and an assessment may have been made under the Child Support Act in respect of children not living with the bankrupt. In these circumstances the obligations of the bankrupt arising from any such order or assessment would not have to be included as reasonable domestic needs of the bankrupt’s "family" to comply with the provisions of section 310(2) because the term "family" is defined in section 385(1) [note 17] as encompassing only dependants living with the bankrupt. However, when assessing the bankrupt's ability to pay under an IPO, the court has previously held that such obligations are reasonable demands upon a bankrupt’s income and has taken full account of the obligations arising from a maintenance order or a Child Support Agency assessment such that it would not make an order for an amount which would limit a bankrupt’s ability to meet those obligations [note 18].

For this reason the amount payable by a bankrupt under a maintenance order or Child Support Agency assessment should be taken into account when calculating the amount which a bankrupt is able to pay under an IPA, but should be identified as a separate item.

tigerfeet2006

According to the Insolvancy Service site CSA payments are still payable.

In bankruptcy, there are certain debts of the bankrupt which are not provable in the bankruptcy, which means that the Trustee will not admit the claim. Such debts include CSA assessments, fines and maintenance. Therefore, the bankrupt will still be liable to pay these debts notwithstanding the bankruptcy order.

http://www.insolvency.gov.uk/freedomofinformation/technical/debts.htm

Have trawelled the CSA site as well and there is nothing mentioned.

fermi

That's a handier quote Tigerfeet. I forgot about those pages on the IS site.

tigerfeet2006

Aw! fanks

pinksteviegirl

Thanks for that - it was really helpful and I have forwarded it to my mate who wanted to make sure that he would still have to pay the CSA as he doesn't want to shirk his responsibilites.