How much excess before you're IPA'd?

Walter_J

It doesn't affect me now as my bankruptcy was a couple of years ago, but at the time my income/expenditure table showed a surplus of about £100 per month and I was not expected to pay anything to my creditors.

What criteria do the OR people use when assessing whether an IPA/IPO should be put in place? Is £100 per month surplus the threshold?

Their literature is a bit vague.

The thing is, a list of expenditure is a bit vague too. If there is a threshold the OR allows you before imposing an IPA then by 'tweaking' your expenditure sheet you could save an awful lot of money over three years.

So what's the threshold?

ClaireLR

Yes I believe it is £100, and they then take 50%, the percentage goes up the more surplus you have

Somewhere there is a list of the percentages, someone will post it shortly I assume (I don't have a clue where it is!)

dalip

Walter
Yes it's £100 = £50, £110 = £55,£120 = £60 and so on. I know as i just had letter from OR to say i have to pay £50 a mth. The above figures are only guidelines as i had £117 surplus and he's only taking £50. There are full figures available somewhere but can not remember where i saw them. Could try the insolvency website.Dalip

maxmycardagain

what do they do with the self employed where figures cant be compiled for weeks till invoices are paid?

wherediditallgo

You can find the table of percentages here.

As for the self-employed, I think they work out an average income over a period of time, & use that as a guide for what IPA to levy, if any. IPAs are paid monthly, so if the monthly variation in earnings is over/under the figures allowed by the OR, then the OR should be informed so that the IPA can be reassessed & any necessary adjustments made.

TaxAvoider

My IPA was agreed at the OR interview based on my last P60 and recent invoices/bank statements. The OR was very reasonable and agreed to a sensible figure based on my comments about future earnings.

Obviously once the IPA is in place you have to be honest , so if you get a sudden increase in income it would not be good idea to "hide it" as you never know when they may ask to see statements etc etc

nomoneyprobs

Sorry if this comes across as thick, but whats being said here is that you need to have £100 surplus before you get given an IPA and Then the or will take £50 of this £100 leaving you with £50 ?

But if you had £99 surplus you would keep it all?

Ian

ImStillAlive

That is correct NMP, just another way the BR system is not fair im afraid

A more in-depth explanation of how IPA,s are calculated can be found here-


http://bankruptcy.informe.com/viewtopic.php?t=18

tigerfeet2006

NMP that's why when we look at I&E's we try to make sure there is as little surplus left as possible because if you have say £88 surplus and the OR disallows something for £25, then 'hey presto!' an IPA!!

Praxis99

Yes IPA payback is such that a surplus of £180 where you would be subject to an IPA (paying back £90 - 50% - to the OR) leaves you in exactly the same position as a person earning £90 surplus and not been subject to an IPA at all!

Its one of the reasons I have accepted a part time job as opposed to a full time job (which starts mid Jan) and will only look to go full time once discharged. In this way I will avoid an IPA and be much better off as a result (over the 36 month period that a IPA would run for once imposed - in my case to the tune of about 10K).

Walter_J

Well it looks like I was very lucky to sneak in under the barrier and not get lumbered with an IPA. Even at £50 per month this would have amounted to nearly two grand over three years. I think my surplus came out at £96 per month.I feel particularly lucky because they allowed the £230 per month HP payments on my car. If it hadn't been for that I'd have been well stuffed!