Income Changes Post IPA/BR

menageamoi
menageamoi Posts: 43 Forumite
in Bankruptcy & living with it
hi

Just thinking ahead. I was made BR in January and have no IPA as I don't earn enough. That's about to change in a month or two so I'll tell the OR and see if that generates an IPA. If it does, then let's say it's for 3 years. My question is - what happens if my salary goes up again ( or down) after I'm discharged from BR - can I apply to have it reduced or can they have it increased once we're outside of the BR year?

thanks
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Comments

  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    First Post First Anniversary Combo Breaker
    Hi menageamoi


    If you're going to have an IPA, this has to start before you are discharged from BR. But if an IPA does start you're obliged to inform the OR of any changes in your circumstances that will affect your income and outgoings until the IPA comes to an end. Depending what the change is, this could lead to your IPA being increased or decreased.

    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • menageamoi
    menageamoi Posts: 43 Forumite
    Thanks Susie

    So any IPA might reduce or even end if my income dropped below a certain level for its duration? But it could also increase if my income went up further?
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    First Post First Anniversary Combo Breaker
    That's exactly right menageamoi. If they believe you can afford £20 per month, or more, after paying your usual bills they can put an IPA in place. It will take all of the surplus money you have spare. If you do have a change in circumstances just make sure you let the OR know.


    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • LincsPaul
    LincsPaul Posts: 131 Forumite
    Best thing may be to ensure your income is low enough (or permitted expenditure high enough) to avoid an IPA before discharge, as an extra 2 years of all your spare cash being taken isn't ideal!
  • menageamoi
    menageamoi Posts: 43 Forumite
    Thanks - yep - that's the plan! At least my income will rise gradually and incrementally from this point so I'll know the trigger point for the IPA. Hard to tell how much slack I have at the moment!
  • Jono987
    Jono987 Posts: 185 Forumite
    First Anniversary First Post
    You could offer for a family member to pay your IPA in one lump sum - if you have a family member willing to help you. I went bankrupt in December 2016 and given an IPA. My mother paid my remaining IPA off in October of last year so it was i think 26 x my monthly payments.

    This means my IPA was officially concluded and after i was discharged on 30th December 2017 i can now freely earn as much as i want. I got a massive pay-rise when i switched jobs in February but can now keep it all so i can save for a house / new car etc :)
  • debt_doctor
    debt_doctor Posts: 4,595 Forumite
    First Post First Anniversary Combo Breaker
    Jono987 wrote: »
    You could offer for a family member to pay your IPA in one lump sum - if you have a family member willing to help you. I went bankrupt in December 2016 and given an IPA. My mother paid my remaining IPA off in October of last year so it was i think 26 x my monthly payments.

    This means my IPA was officially concluded and after i was discharged on 30th December 2017 i can now freely earn as much as i want. I got a massive pay-rise when i switched jobs in February but can now keep it all so i can save for a house / new car etc :)
    Hi Jono,

    I've never heard of that happening before, very interesting.
    Did you ask for an 'IPA settlement' or was it offered to you?

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
  • menageamoi
    menageamoi Posts: 43 Forumite
    Yes Jono/DD

    That's really interesting. Makes it really worth thinking about if a) there's a chance my salary might increase substantially over the next few years b) I could find someone to pay it! :-)
  • LincsPaul
    LincsPaul Posts: 131 Forumite
    Hmmm are you sure about this early pay-off option? All I can find is this in the technical manual:

    31.7.175 IPA/IPO variation to deal with receipt of a pension/ lump

    Unfortunately my phone isn't letting me copy and paste the whole section but basically this accounts for the grabbing of the remaining value of the IPA should you come into money (e.g. pension lump sum or gift, lottery win etc).

    What it doesn't do it let you off the hook should your income go up and the 3 year period is still active. Might want to check the small print.
  • menageamoi
    menageamoi Posts: 43 Forumite
    Yes I came to the same conclusion - not sure how Jono managed to get them to write it off irrespective of future earnings within the IPA period of three years?
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