Debt Camel’s bankruptcy information looks at the major questions most people have about bankruptcy – will my job be affected, what will happen to my house etc. There are two other types of queries that people have: concerns about their assets, which I covered in a previous article, and worries about what powers the Official Receiver has to control people’s lives, which I am going to be looking at here.
Will the OR make me move somewhere cheaper ?
The OR doesn’t have any direct power to tell you that you have to move because your rent is too high or because it would be closer to your work or for any other reason.
The OR can control your total expenditure indirectly by setting an IPA which you have to pay each month for three years. Only about 1 in 6 people pay an IPA after they go bankrupt – most people don’t have to make any monthly payments at all.
So in theory if your rent is £4,000 a month the OR could decide that you could live somewhere more modest for say £1,500 and by setting an IPA at £2,500 you would be forced to move.
However, when an IPA is set the OR has to take account of your “reasonable domestic needs” (read more about this here) and that will almost always mean carrying on living where you currently are. I have come across quite a few people worried about their rent levels and I am not aware that any of them had any problems in practice. Unless your rent is absurdly high, then the OR is very likely to just accept it and add that cost line into your IPA calculations.
This is one of those difficult areas where a debt advisor feels pretty confident but the client often would like to see it written down exactly what will happen, and that isn’t going to happen. If you are really worried, then get some more advice, possibly posting on one of the forums, see Where to get help and advice.
I need to do less overtime, it’s making me ill
This isn’t going to be a problem. You don’t have to justify your decision to the OR at all. You earn what you earn, and that’s the amount that goes into your IPA calculations.
Am I allowed to go to uni? I want to change career
The OR can’t stop you leaving your well-paid job. Providing you will be able to pay your bills as a student, that’s fine.
I want to emigrate to X where I have family
You can emigrate whilst you are an undischarged bankrupt. The Insolvency Service says:
Generally, where a … bankrupt wishes to leave the jurisdiction, there is no legal requirement for them to seek leave of the court to do so.
But you do need to co-operate with the Official Receiver so you are not seen as ‘absconding’. It would be sensible to expect to stay in the UK for a month or two after you go bankrupt to have your interview with the OR and organise any information that is requested. You should keep the OR’s office informed of your address at home or abroad.
The fact that you may take some time to settle and find work abroad doesn’t matter. If you have no earnings then there will be no IPA.
(N.B. you may find it more difficult or impossible to emigrate to some countries if you are bankrupt – you need to check the rules for the country you want to go to.)
I need to start paying Child Maintenence
Provided this is at the normal CSA rate for your situation, this will be accepted as a line in your expenditure when an IPA is set.
I’m living at my parents but I want to rent a place myself
No problem – the OR can’t make you stay with your parents even if it is a lot cheaper. Moving out will increase your expenses and so any IPA will be reduced.
You may want to consider doing this before you go bankrupt, because you need to find a deposit and it can be easier to rent before you go bankrupt, but the OR will not stop you moving out afterwards.
Can I accept a gift whilst I am bankrupt?
It depends what the gift is and how much it is worth. Whilst you are undischarged, the Official Receiver may claim “after acquired property” i.e. things which you have been given (or inherited or won etc) after you went bankrupt, but there is a list of exemptions detailed here.
So the OR is not going to be interested if your mum gives you a new coat or some new curtains for Christmas – they would come under the exclusion of ‘normal domestic items’. In practice the OR is neither going to know nor care if there is a £20 note slipped into your birthday card.
You may want to consider alternatives for larger gifts:
- the gift could be postponed until after you are discharged, or made to your partner if they are not bankrupt;
- if it is a car, then mum could buy the car and retain the beneficial ownership and just say that you are allowed to register, insure and drive it;
- mum could pay directly for services rather than give you the money to pay for them e.g an expensive holiday for you and the kids, school fees.
Am I allowed to have savings when I am bankrupt?
Yes. In fact as you are likely to find it difficult or impossible to borrow money, it’s pretty essential that you try to accumulate a small emergency fund.
Other questions
If you have other concerns about bankruptcy which this and my other bankruptcy articles don’t cover, then you could ask them in the Comments below. I can’t give you advice on your specific situation – see Where to get help and advice if you need this – but I’m happy to try to answer general queries.
Bankruptcy – the big Qs (house, job etc)
Will the OR take my… Questions about assets
What you need to know with hardly any jargon!
Jan says
I have an interview with the OR. She has given me a list of things to have ready however one of her questions is where did the money from my house sale go. It was only £6880 and was over 2 years ago. My overdraft swallowed up £1850 and the rest was spent on general living expenses with the odd thing for the house and decorating. None of this was outlandish but I have no receipts or proof. Can she reverse my bankruptcy order or worse?
Sara (Debt Camel) says
HI Jan, I would have thought that if you look at your bank statements and credit card statements for that time, you can probably identify some items that you bought. If you were renting, have you looked at rental deposit, first months rent and moving costs?
Not having receipts sounds pretty normal to me and it may well do so to the OR.
If in the end she thought you weren’t telling the truth and that you gave the money to someone else, then I would have thought the worst that would happen was a Bankruptcy Restriction Order.
Laurie Allison says
Hi there, I am hoping to start a job in August, and to declare bankruptcy after that. Because I will start the work part way through the year, will I be getting a tax refund sometime in May/June 2017 when I am still bankrupt and could the receiver slam me with an IPA due to this one off amount? At the moment with the job I am due to start, I will just have the income and basic living expenses balance so I will not get an IPA. I am not even sure if I would get a tax refund considering that one does not pay income tax during bankruptcy? Please help :-) Thank you
Sara (Debt Camel) says
It’s hard to guess whether there will be a tax refund. If you are asked to pay the tax to the OR for the rest of the tax year, you should point out if you are being charged “too much” tax because you are starting part way through the year.
However to put your mind at rest, if there is a tax refund then this would not result in an IPA being imposed. An IP can only result if you have sufficient spare “income” and any refund would be a one off payment and wouldn’t be classified as income.
Doug says
Hi there,
I have been declared bankrupt for nearly 2 months now and had my OR interview etc. Most of my creditors have been informed now and have stopped contacting me. I wanted to ask two things really, I dont have an IPA now, if my situation doesnt change till I come out of bankruptcy am I unlikely to be now given an IPA? Also how often do the OR contact you throghout the process? I haven’t heard from them for over 5 weeks now and I hoping I don’t again, I want to try and move on from it.
Thank you
Sara (Debt Camel) says
If you talked to a debt adviser before going bankrupt, they should have been able to say if they thought you were likely to get an IPA. Only about 1 in 8 people does.
If you have no assets that have gone into your bankruptcy, it may be you don’t hear anything more from the OR at all. If no IPA is set up, there is no need for the OR to keep talking to you. You do need to inform the OR of any changes in your situation – changes to your income, moving house, getting a windfall etc.
Andrew says
Hi There
I am bankrupt for 3 months now and I have no IPA set up. I wanted to ask, if I was to change job and earn more money but my partner is now earning less money therefore overall about the same would I be required to pay into an IPA? I am thinking of changing jobs which will pay me personally more but my partner is thinking of working part time therefore overall about the same however I will have to pay more into the household due to having more income therefore it wont be 50/50 exactly. I am conscious of not getting tired into an IPA otherwise there is not point in changing jobs if it means I will have to enter into one.
Sara (Debt Camel) says
Well you are aware of the issues. I’ll make the general point that it may depend how close you to an IPA at the moment. Also you need to consider after tax pay and any changes to benefits. If you want some detailed comment on your specific situation, you could talk to National Debtline and go through your Income & expenditure and your partner’s income with them.
Andrew says
Thanks Debt Camel. I am just do not want to be tied into an IPA for 3 years. I would rather earn less for the next 9 months and then I am free from any IPA. I will speak to ND, thanks for your advice.
Sara (Debt Camel) says
completely understandable! That’s why I want you to look at the details rather than having me make an informed guess.
Andrew says
Thanks for you help.
1 last question. Hypathetically if I got a job paying ‘X’ amount and the OR said I can contribute £200 per month towards an IPA and I agree (This is done before my bankruptcy is discharged) what would happen after being charged if my earnings dropped and I dont have to pay the £200 again. What I mean is after bankruptcy if my earnings drop and I now cant afford the IPA is it stopped for good OR if my earnings changed again can they re-start it?
SimSim says
Hi there,
my husband has declared himself bankrupt a month ago. He lost his job in October last year, I was made redundant in November last year, both still looking for a job, unemployed. Benefits are so very tight, all our credit cards are maxed out by now- we both paying loans, have 3 kids. Our oldest one is 19 already, struggling to find job as no qualifications or experience, the other two are still very little. My husband had a loan of 25k taken out in May last year to buy a caravan were planning to live in hoping to save money long term as rent in London is so expensive. Unfortunately that never happened: we owed money to my brother, long long story. It came to 30k+ over 8-10 years. As his business was doing badly, he asked for his money back. So last year first week of September we paid him back 35k – a loan money plus our own savings. My husband was paying his loan till January this year, then stopped because could not keep up any longer. He has told the official receiver about our debt to my brother and the official receiver (or examiner, don`t know) is asking for my brothers name and address. My question is, can official receiver contact my brother? Even though he lives abroad and does not speak English? And my biggest worry is that I would not want anyone to know our financial problems, we haven`t told anyone about my husbands bankruptcy and I am quite upset and ashamed having to go this route. My husband is very depressed also because of our current financial situation and the whole bankruptcy thing. would be grateful for any advice, comments. Thank you
Sara (Debt Camel) says
Your husband needs to give the contact details for his brother to the Official Receiver and it is likely thta the OR will want to talk to his brother. And I am afraid your husband should tell his brother what has happened.
I don’t know what the OR will decide to do. He made the payment to his brother at a time when he and you both had jobs. And he carried on making the loan payments for as along as possible.
I think you should go to your local Citizens Advice for help, both with your general financial situation and benefits and also for support in dealing with your husband’s bankruptcy.
SimSim says
Thank you for your reply.
Just one more question- will the official receiver inform me prior to contacting my brother allowing me time to speak to him and explain what happened?
And just to clarify, It is my brother, and my husbands brother in law.
Thank you
Sara (Debt Camel) says
I don’t know. I think you should talk to your brother as soon as possible.
SimSim says
Thank you for your reply.
I am really panicking now. I just can`t get my head around the fact my family will find out about my husbands bankruptcy. My brother is so close to my father, he will definitely tell. And they both are not very understanding and compassionate people in the world. When my husband searched all the forums or spoke to StepChange, there was no mention that family and friends might be contacted in relation to his debts. I really do not want anyone to know. Can I ask OR not to contact my family? Or just not to disclose their details?
Sara (Debt Camel) says
Did your husband tell StepChange about this very large debt he had paid to a member of your family a few months ago? If he did and StepChange didn’t think it was a problem, then I suggest he should talk to StepChange about his current situation and see what they say.
Steven says
Hello debt camel
I’ve been bankrupt for 3 months now and I lost my job just after going in to bankrupcy. I’ve managed to pick up work contracting and been making a bit but more money than last year. I pay 241 a month to the official receiver. I was just wondering does the official receiver request to look at my bank statements and payslips after six months? How concerned are they about what you are spending your money on? I’m making my monthly contributions so would they be concerned otherwise?
Kind regards
Sara (Debt Camel) says
You have to tell the OR if you are making more money.
The OR doesn’t care what you spend your money on, but an amount is used in the IPA calculations. So if you have £x a month “allowed” for holidays and choose to spend it on cable TV that’s up to you. Your bank account statements arent usually asked for during an IPA.
If your expenses have increased – perhaps you ar traveling further to work? – you should tell the OR and these will be taken into account.
Contracting can cover a lot of things – if you are self emplyed now or working through a small limited company you could discuss your expenses with Business Debtline, in particular you want to put aside enough for taxes.
Once you have an IPA it’s not usually worthwhile trying to earn more money. There may be other non financial reasons for you to want to do this – interesting work, good for your CV etc – but typically you just end up paying more to the OR. It’s a stupid system, but that’s how it is.
John says
Hi debt camel,
What is the process for making IPA payments? I went bankrupt 3 months ago due to being made redundant last year. I am currently job hunting and wondered what my legal obligations where to the OR if I am lucky to secure work. From my research I have seen people changing careers and taking less stressful, more enjoyable jobs etc that pay much less to avoid an IPA. As I am a contractor (Paye via umbrella), my income varies considerably from month to month (i.e. One month can see lots of hotel & travel expenses which can no longer be offset against tax). It would be difficult to document a SOA due to huge variations. Would I need to contact the OR each month with a new SOA? Some contracts are only 3-6 months so I could have gaps of months between work. Would the OR look for a pro-Rata SOA? I can’t find any clear cut information on this.
Secondly there seems to be a stigma attached to agencies regar bankrupts. I would prefer them not to be aware providing this is not illegal. I went BR on march 1st this year thus I don’t think I’ll get an NT tax code, is that corrrect? Otherwise this would be a flag to any employer.
Finally does an OR monitor income either via tax paid to HMRC or by requesting payslips and bank statements. I want to assure I am compliant but I don’t want to be unfairly screwed over for reasons listed above. Surely some people must lie about figures or not even notify the OR about employment. I’ve seen posts with people stating they heard nothing from the OR for 12 months. Where would this put someone legally for ‘keeping quiet’ surely it’s a form of fraud?
Thanks in advance
Sara (Debt Camel) says
“Keeping quiet” if you have started to have an income is an offence.
Some people may “get away with this” – but it would be extremely foolish to assume you could do this.
It can be a very sensible decision to decide to take a lower paying job for the next 9 months if this is less stressful. Or to go to uni or for some other poorly paid training. Or backpack around the world. If you earn too little to pay an IPA in the next 9 months, an IPA cannot later be imposed. Taking a lower paid job that would allow you to add some skills to your CV could be a good option. Or a part time job. The system is bonkers, but it is what it is.
It is hard to contemplate all the permutations if you get a well paid but short term contract. All I can say is that in my experience ORs are reasonable if you are open with them.
Andrew says
Hi Sara
Taking John’s question one step further. I have been bankrupt since January. I am looking for a new job now. I am not in any IPA. Questions I wanted to know and noboby seems to know where:
1. If I earn more but which would enable an IPA but then my partner earns less would this be taking into account?
2. What happens if I start an IPA because I earn more than my expenditure says I can but AFTER 12 months and coming out of bankruptcy my earnings then drop, what happens then?
3. If you are in an IPA then your wages drops after 12 months so you dont have to contribute any longer BUT then a couple of months later your wage increases again, do you need to inform them?
Sara (Debt Camel) says
1. Yes indirectly. Because your partner is earning less and you more, you will have to cover a much larger proportion of the household expenses, so the amount of money you have available for an IPA will not have gone up by as much as your income alone would suggest.
2. Any changes to your circumstances during the IPA period will be taken into account – you earning more or less, other household income (from your partner or benefits) changing, having to move and rent somewhere more expensive etc You are not stuck with a fixed monthly payment for 3 years that becomes unaffordable.
3. You need to check this with your OR. It is possible for an IPA to be ended, but it is more normal for it to just be suspended, resuming if you earn more. But the three year period is never extended.
Andrew says
Hi Sara
Thanks for this. I wasn’t sure, I thought if you were in an IPA and then you come out of bankruptcy as per above if your earnings dropped and the IPA was suspended but then you found a new job paying the same whilst in the IPA you dont have to tell them as you are no longer bankrupt, how could they find out anyhow?
It’s rather frustrating as I am not being held in an IPA I would rather just earn less or freelance so I don’t get caught in an IPA.
Sara (Debt Camel) says
If you have an IPA you are obliged to tell the OR of change of circumstances even after your discharge. It would be very foolish to assume you could not tell them and get away with this – a seriously bad idea.
I do understand the whole system appears bizarre with its complete lack of incentive for someone to earn more money. But that’s the way it is. Keeping your earnings down until you are discharged with no IPA is for many people a sensible approach.
Andrew says
Thanks Sara.
I am just conscious of not being caught in an IPA, I will feel like the bankruptcy is ongoing for another 3 years which mentally doesn’t do it for me. I will need to make sure I earn butterbeans then till I come out of bankruptcy.
Andrew says
Hi Sara
I have been bankrupt now for 6 months and not in an IPA. I have had a letter from the Adjudicator that they have passed my case now over to an Insolvency Practitioner, they just said they have finished with my case, is this normal? I am not sure why they would have done this.
Regards
Andrew
Sara (Debt Camel) says
Do you a house? Any assets? Are you sure the letter comes from the Adjudicator, not your official receiver?
Andrew says
Hi Sara
The letter is from the ‘Insolvency Service’ – Official Recieve’s office. It states – ‘In the office of the adjuducator’ then the details of the insolvency practitioner and says they have been appointed trustee of your bankruptcy estate.
I dont have any assets all, no house nothing. This is the first contact I have had from them since late January pretty much.
Is this normal?
Regards
Andrew
Sara (Debt Camel) says
I don’t think this normally happens – I suggest you phone the OR’s office and ask why a trustee has been appointed when you have no assets.
Andrew says
Hi Sara,
Update. OR has passsed my bankruptcy over to a Insolvency Practioner as most of my creditors requested this therefore she has to. They have no contacted me to ask about doing a new full expenditure, why do you think they have done this?
Also, it asks to disclose my girlfriends income, legally do I have to do this when she was nothing to do with my bankruptcy?
Sara (Debt Camel) says
I wouldn’t worry about your case being passed to an IP if you have no assets. React to what happens, don’t worry about why things are being done or worry about what might happen.
You are being asked to disclose partner’s income so that it can be worked out how much of the household expenses you should be paying. Of course, you may not know how much she earns, in which case the OR will normally assume 50/50 split.
Andrew says
Hi Sara
No i don’t have any assets, still not sure why this has happened. What happens if say our outgoings are £3K total per month, I earn £2K, partner earns £1K, they only take £1K and £500 into account or the whole amount we earn to cover our living expenses?
dee says
Hi
How does the OR set your budget is it
similar to what you fill out for a DMP?
Sara (Debt Camel) says
No, your expenses are pretty much what you spend. It’s unusual for the OR to say that some expenses can’t be counted. For example gambling is usually just accepted which it would never be in a DMP. Things which have not been accepted are foreign hotel and car hire, a lot of eating out and savings. But generally the OR isn’t judgmental.
dee says
Thank you.
Will my landlord be told that I am bankrupt? I’ve never late paid rent?
Alan says
Hi Sara,
I’d like to say the information on this website is phenomenal! I have been in the citizens advice and i knew more about bankruptcy than the women I spoke to. I’ve taken advice from business debtline as I’m self employed and also other similar organisation’s, all so I can be sure of my decision to come. If you could give me your thoughts I’d really appriciate it. Basically I a am newly self employed, I started my own landscape gardening business which was ok but now very slow with no work at all with no income. Will I be exempt from an IPA although my earnings and outgoings in past few years and even months have been in the multiple thousands. I have one creditor which is a personal loan I’ve had for a few years now. But now times are tough I see bankruptcy as a way out and a chance for a fresh start. I’m just concerned about being hindered with an IPA.
Sara (Debt Camel) says
An IPA is based on your current 8ncome, not what you used to earn. But it’s not a snapshot at the point you go bankrupt, it will depend on what you earn during the year before you are discharged.
Beth says
Hi Sara,
I went bankrupt two months ago. I had a really brief talk with the OR over the phone – about ten minutes – and he sent me some forms to sign – but I haven’t heard anything since. Mine is definitely a straightforward case, but is that really it? I have been expecting the 3-4 hour interview that I read about on here but nothing has happened so far. Do you think it will?
Also, can the OR ask to see my current bank statements, post-bankruptcy order? Should I be careful not to show any frivolous spending now (albeit very low level stuff!)?
Thanks,
Beth
Sara (Debt Camel) says
That is probably all there will be if your case is straightforward. The OR won’t care what you spend your money on provided you have given correct information about your income, rent, bills etc.
Julie says
Hi, I was discharged in July 2016 and subject to an IPA which ends in August 2018. However I am currently not paying into an IPA as my figures were recalculated by the receiver shortly after bankruptcy which made no IPA payable (yet I am still subject to one so pay any bonus etc). There is a possiblity of me being offered a settlement agreement to leave work instantly instead of resigning and working out my notice. Will I have to pay this into my IPA? I have read that the IPA is for income only but just need confirmation as bit nervous to accept this and then lose it. I have tried to ask the official receiver but havent received a respone as of yet so any help would be gratefully appreciated. Thanks so much.
Sara (Debt Camel) says
This article covers redundancy after bankruptcy: https://debtcamel.co.uk/or-redundancy-money/. But you will feel happier if the OR confirms this to you.
Julie says
Thanks so much Sara, very much appreciated.
Lucy says
Hi Sara
I have submitted my application today and want to thank you for your amazing website; it has helped so so much.
I have a question regarding occasional pay increases. I believe I will have to pay into an IPA looking at my budget, if I worked an odd shift every 2-3 months (a night shift on a weekend when my LO is with his Dad would mean approx. £150) would the OR take all of this income for the IPA?
I understand if I had a pay rise (I am expecting an incremental raise in April 2019, will be approx. £30 a month) they will take that, just wondered if it would be different for ad hoc overtime.
Many thanks
Sara (Debt Camel) says
If you are paying an IPA, then additional money you earn will very probably all have to go to the OR. So it would be pointless to work those extra shifts. Have you talked to a debt adviser about your budget? Because not many single parents would have to pay an IPA… you could post details of your income & expenditure on here https://forums.moneysavingexpert.com/forumdisplay.php?f=136 and see what people think?
Lucy says
I will do thank you!
Andrew says
Sara:
Thanks for the excellent website.
I plan to declare bankruptcy and then immediately move to Sweden. During this time, I will be supported by approx 1200 GBP per month from my parents.
My specific questions are:
1. Does the above amount count as income?
2. Is 1200 a level that typically would incur an IPA?
3. Sweden requires that I have a certain level of income to qualify for residency. Will the OR take that into account?
4. If 1200 is liable to incur an IPA and I ask my parents to reduce the amount, does that create any issues?
Many thanks
Sara (Debt Camel) says
Gifts from your parents don’t normally count as income – they could stop at any time!
There is no set level of income for an IPA – it depends what your expenses are.
I think you should talk to a debt adviser about your situation – try National Debtline: https://www.nationaldebtline.org/
Patrick says
Hi there,
In preparation for what I need for the meeting with the OR: what happens if I don’t have credit card statements as these are all online and my accounts have been blocked by the credit card companies? Will this be an issue for the OR? The same is applicable to one of my former bank accounts. Will the OR still have access to these statements or not require them if they are blocked?
Sara (Debt Camel) says
You can ask for copies of statements from closed and blocked accounts. This won’t be a problem.
Patrick says
Hi there,
I will have finish my application and pay the fee tomorrow for bankruptcy. I have had a job offer abroad for about 5 weeks time. Will this be an issue for process or is it ok as long as I have had my meeting with the OR prior? Would obviously be able to provide the new work contract, pay and address to the OR abroad. As it would be in another EU country would this be more easily accepted?
Sara (Debt Camel) says
There shouldn’t be a problem with you leaving the country if you give the OR your contact details and co-operate with them. Most OR meetings are within 5 weeks and by phone, unless you have a business.
PS can I check you have had some advice that bankruptcy is the right option for you? It may be, but it is worth 30 minutes of your time to talk to an expert to be sure. Phone National Debtline on 0808 808 4000.
Patrick says
Thank you. That makes sense.
I have had advice from my local citizens advice and a IP.
Patrick says
Just as an update (also for others interested in the subject): Bankruptcy order went through within 24 hours after application and the OR got in touch 3 days later. The OR advised me I can live anywhere / work anywhere outside the UK as long as I keep in touch and they know where I am based. The OR also stated the Interview would last approx. 45min and there was no questionnaire to fill out.
AJay says
I was discharged from bankruptcy after the usual 12 months . I have an IPA that run for another 2 years as this was set up lady year.
In this week’s pay slip I have received a tax refund for the year I was bankrupt .
I assumed that this would be paid directly to Clark Wilmot who manage the IPA .
I’m assuming this money has to be paid to them as it was accrued (even if it’s as a result of being over taxed). Should I just call them directly yo pay it . Will they ask for a new statement of affairs as my tax code has changed ?
Sara (Debt Camel) says
yes, contact Clark Wilmot with the details. And also explain that your tax code has changed.
Dan says
Hello. Im sorry for my writtng english is not my first language. I declared bankrupcy at february. I have IPA to pay 200 pounds a month. My question is if I can move abroad (Poland). Im not trying to avoid paying IPA only my situation change. My 85yers old mother is not well and she needs a care. I dont know if Im ok to move and how should I talk to OR about my situation. And whats gonna happend to my IPA. Im afraid that informing OR about my plans may put my in some trubles. Thank you for any help
Sara (Debt Camel) says
Hi Dan,
you English is fine – no need to apologise!
When you are bankrupt, you can leave the country to live abroad, see the I want to emigrate to X where I have family section in the article above. You can also reduce your income or give up paid work completely. If this happens your IPA will be reduced, very possibly to nothing, it will depend on whether you have any income in Poland and what your expenses are.
Your IPA will always end after three years, even if it has been reduced to nothing. So if you get a good job in a 3 years time the OR can’t pop up and say you now have to pay an IPA for three years.
You need to tell the OR about your plans. The OR isn’t going to mind, they aren’t going to try to persuade you to stay in the UK and earn money so you can pay an IPA. They will want to know where you are moving to, and once you have moved you should inform the OR if your situation changes eg you get a part time or full time job. Carry on telling the OR until the three year IPA ends.
Dan says
Thank you for so quick response. Im feeling sa motivated now to make next steps to come back home. Thank you so much and wish you all best!
George says
Hey, I would really like some advice on my current situation. I have got overdrafts and a credit card totaling £6640 and a separate debt that has been carried over by an English debt recovery firm from when I previously worked and lived in dubai. The dubai debt is around £30,000 due to interest that has built up but if I agree to a payment plan it can be dropped to £8,000. So at the moment if I was two pay all my debts off in one lump it would be £14,640. However I do not have this money hence why I am here.
I have now started a new job and been promoted already to a very promising role where the commission can be very generous, but with this I have also just found out my partner is pregnant.
The way we have gone about things is I pay all the bills and cost of living such as food and she saves all her wage and puts it away for the baby.
At the moment my pay is not great and I have wrote out a list of payments I make but understand they would ask for more money for insolvency.
I would be happy to make payments £300 over 4 years and even if I earn more the payments of the ipa not change due to having a baby and needing to put money aside for a rainy day but I would still aim to clear the balance. it just stops the interest going up. would this be acceptable? do they negiote well the OR’S ?
Sara (Debt Camel) says
It’s not a question of negotiating with an OR. The OR will look at your current income and expenses and expect your partner to be paying their fair share of the household expenses and set your IPA accordingly. If your partner later has no income or a much reduced income on maternity leave and your household expenses have gone up your IPA would then be reduced, perhaps to zero. But if you get large commissions then the OR may claim those. An IPA lasts 3 years, never longer.
It sounds like you are in a fluid situation, in a job with good prospects but where the pay is currently low and expecting your first child. I am not going to make a guess about whether bankruptcy is a good option for you now, you need to talk to a debt adviser about the details of your situation, try National Debtline on 0808 808 4000. It may be sensible to have a debt management plan as a temporary solution for a year until you know more about how your job will go.
One thing you probably should rule out is an IVA. At the moment you can’t tell if your situation will get worse so you couldn’t afford the monthly payment and an IVA would fail (30% of them do 😧) or whether your situation will improve and you can repay your debts without Insolvency at all. Also the Dubai creditor is so large they may refuse to approve an IVA.
It’s a shame you can’t take the offered settlement offer now. But National Debtline can also talk about whether the Dubai Debt is enforceable in England. And you can make a settlement offer yourself if you ever get a large bonus.
Chloe says
Hi.
I am thinking of bankruptcy but have somr questions
1- does the OR have access to your bank accounts if you are thinking of rebudgeting mid bankruptcy?
2- if husbands salary drops do I have to show proof of his salary even tho he has nothing to do with it?
Sara (Debt Camel) says
Bankruptcy is a pretty non intrusive process for most people after the application and your interview with the OR, usually on the phone. Your spending is not monitored, if you decide you don’t want to spend any money on clothes and instead spend it all on eating out, the OR won’t know or care.
You have to notify the OR of major changes in your income and expenses in the first year. And until the end of your IPA if you have to make monthly payments – 5 out of 6 people who go bankrupt don’t have to pay anything.
If your husband’s salary drops it actually helps you – you would then be expected to pay more of the household bills so any IPA you pay would be reduced.
Chloe says
And do they have access to your bank accounts?
Sara (Debt Camel) says
No, but if they ask you for information you have to provide it. I have said your spending isn’t monitored, is there something else you are worried about?
Chloe says
My husband is not too happy with all this and I don’t think he is going to provide anything as we only have a joint bank account now. So am worried its just going to cause alot stress if they ask for statements and my husband says no.
Sara (Debt Camel) says
Why don’t you open your own basic bank account and close the joint account? You don’t want to have a joint account when you are bankrupt as it would affect your husband’s credit rating.
Can I suggest you talk to National Debtline on 0808 808 4000 about what your options are apart from bankruptcy? They can also talk to you about what happens after bankruptcy. If if you don’t go bankrupt, dealing with your debts is also stressful…
Julian says
Hi. I have decided to file for bankruptcy. What happened was that in basically two years I accumulated a £35 K debt. How did it happened? I moved to London trying to make it as a writer but ended up leaving my driver job one year ago to fully become a writer. However life quickly got expensive and I basically started living off credit and paying back credit with more credit and even took out a loan. I was thinking soon as I start earning big I’ll pay everything. That hasn’t happened and my debts have become too much. I don’t have any properties or assets and I’ve been living in an airbnb so no income. My question before I file for bankruptcy can I still pay my rent with my credit card? Use it in general before filing as I have no income. Also is my situation ok to file bankruptcy? Thanks
Sara (Debt Camel) says
“My question before I file for bankruptcy can I still pay my rent with my credit card? ” no, this is not a good idea. Once you have decided to go bankrupt, you need to stop using credit.
“Use it in general before filing as I have no income.” why have you no income? go and sign on at the Job Centre. Find a job. Apply for Universal Credit.
If you still want to be a writer, go and find somewhere a lot cheaper to live and get a boring job that pays for the basics.
“Also is my situation ok to file bankruptcy?” Bankruptcy doesn’t actually create money for you. If you have no income and no permanent place to stay, you need to think of those as your main problem.
35k is a lot of debt and bankruptcy may be a good option for you (however obvious you think this is, it is always worth. Taking advice on this, I suggest you phone National Debtline on 0808 808 4000) but your priority is an income and a cheap place to live.
Julian says
Thanks. I will look for an income but I think I should apply for bankruptcy soon as the monthly payments are over £600. Do you think I could pay for the bankruptcy fees with a credit card or is that also not a good thing? Looking at the bankruptcy process on this website it seems quite straightforward as in I thought I had to go to court and all sort of things but it almost looks as if I can do everything online and over the phone. Also if I’m given a BRO but no IPA after I’m discharged and I get a job with a good income will I still need to pay the OR? Thanks
Sara (Debt Camel) says
I think you should talk to National Debtline on 0808 808 4000. They will be able to give you personalised advice and answer your questions.
Julian says
Thanks for your answers and sorry to keep asking questions. I tried national dept help line and I couldn’t get through to anyone so I tried stepchange and they told me bankruptcy was an option or either payment suspension. No IVA offered as I have no income so I will need to move back to my parents. However there’s one thing I still can’t understand and the person I spoke with wasn’t sure neither. If I ask for my parents to put the bankruptcy fees in my bank account (I have credit and a loan debt on this account) and go ahead online and pay will the bank try to block the payment as they probably can see I’m paying for bankruptcy fees? How about if I pay it by credit card will they also block the payment? The only other option I can see is opening a new bank account with zero debts and paying with that. What do you recommend? Also the lady I spoke to wasn’t sure if I get a job after being bankrupt discharged with no IPA but with a BRO in place will I still need to tell and pay the OR if I get a job or there’s money coming in? Thanks
Sara (Debt Camel) says
See the “Someone else paying for you” section of this article: https://debtcamel.co.uk/pay-bankruptcy-fees/
If you have been discharged with no IPA, one cannot be set up afterwards: https://debtcamel.co.uk/discharged-from-bankruptcy/
Helen says
Hi Sara, thanks for your site. I was declared BR 10 days ago. The OR has agreed my budget but identified £130/month available due entirely to an income tax/council tax ‘holiday’ running from Oct-19 to the end of the tax year in March 2020. However, as far as I can discern, this means I have now entered an IPA which means declaring any changes over the next 3 years. Is this correct? The ideal route to freedom seems to be to endure a tight budget for 12 months and then be discharged with no possibility of an IPA, but I seem to have fallen under the smaller percentage of those who have a tiny amount of ‘surplus’ (from nil tax code) but then are under obligation to declare I&E for a further 24 months. I don’t have an issue with the fact I’m in debt and need to make repayments (reason for debt certainly not due to extravagance), but feel aggrieved that the 3-year payment outcome can and is avoided by understanding the system in advance. Am I too late to make any rectification to my budget? ~ Helen
Sara (Debt Camel) says
if the only reason for you making payments is that you are not paying tax or council tax, these are not the start of a three year IPA, they are payments that will only last until March next year. Ask your OR’s office to confirm this.
Helen says
Thanks so much for your quick response. I’m not sure this is accurate – my initial IPA states “{my name} agrees to pay £130/month for a period of 6 months to the OR…I acknowledge that my obligation to make payments under this agreement does not end when I am discharged from bankruptcy and that failure to make payments can affect the date upon which I am discharged.”
Sara (Debt Camel) says
Ask your OR – I think you will find this is just an agreement until Match, not a 3 year IPA.
Helen says
Thanks, Sara, I will email the OR tomorrow. If it’s a 3 year IPA, as implied by the wording that the agreement does not end when I am discharged from bankruptcy, I’m not sure how I will manage.
Sara (Debt Camel) says
please let me know what happens. It may well be that wording is just a hangover from the time a few years ago when some people were discharged after only a few months.
Daniel says
Hi Sara
I have spoken to payplan and they advise me to either iva or bankruptcy they have worked out my budget and say i can afford £200 a month i have 2 small children and no assets i work and claim universal credit if i went bankrupty would i have to pay a monthly fee as high as £200
I see you say 1 in 6 pay monthly fees im so stressed with it all and trying to decided between the 2 is very difficult
Hope you can give some advice
Thank you
Sara (Debt Camel) says
Did Payplan give any reason why an IVA would be better for you?
I would say that £200 a month sounds high for someone with 2 small children on Universal Credit. Do you have a partner? How old are the children?
What allowance do you have in the income & Expenditure Payplan have drawn up for clothes and shoes for the kids? School uniform? Clothes for you? What is down for food? cleaning stuff and toiletries? Holidays?
Daniel says
Hi sara
Thank you for getting back to me,
Payplan havnt really gave me a reason they said it is my choice but most likely i would have to pay the same amount monthly if i went bankrupt as an iva my 2 children are 5 and 3 in december, so 1 just started school and 1 is starting 16 hours nursery in january
My wife would like to go back to work once my son goes next year but not sure if thats is going to affect it i work full time and we get universal credit rent is £1200 with out bills i am finding it hard to work out a budget as the kids have only just started school and nursery i have the budget from payplan can i put on here for your advice Thank you so much Dan
Sara (Debt Camel) says
So just look at the payplan budget – what is in there for clothes? for food?
Daniel says
Hi Sara
I have gone through my budget and adjusted a few things not sure if its to much or to low but i tried to be honest i am going to try step change see what advice they will give i sort of felt payplan where trying to push me to iva ? But my head is all over the place so not sure
1 more question i cant see anything for holidays on any of the budget forms
Can i add for holidays ?
Thank you so much
Dan
Daniel says
Clothing and footwear £50
Food and house keeping £578.33
Nothing for holidays payplan have not said about that can i add holiday?
School uniform for both £20
Trips £5
Toiletries £50
Thank you
Leanne says
Hi, I’m currently filling in the forms for BR and am scared I will miss a debt off. I went through a time of really bad anxiety and depression and stopped opening mail and paying bills etc plus I have tax credit overpayments, housing benefit overpayments, council tax arrears and rent arrears. I’m all equates to about £8000 I’m in debt and I earn £1000 per month before AOE. Will the bankruptcy accept and take off my attachment of earnings? I have 3 coming off wages every month. Also do you think I’d need to pay an ipa? I have no dependants, no assets and am single. Thanks and sorry if I babbled!
Sara (Debt Camel) says
Hi Leanne,
I will have a go at answering your questions, but first I think it is important that you urgently talk to a good debt adviser about your situation. There is a different form of insolvency in England called a Debt Relief Order (DRO) which may be more suitable for you than bankruptcy as you owe less than £20,000, are renting and have a low income. I can’t tell if you meet all the criteria for a DRO but this is well worth you investigating! I suggest you phone National Debtline on 0808 808 4000 or go to your local Citizens Advice if you would rather get advice face to face, not on the phone.
“am scared I will miss a debt off”
It’s good to get all your debts listed as they will then be told about your bankruptcy. But if you miss one off, the good news it will still be included in bankruptcy.
Will the bankruptcy accept and take off my attachment of earnings?
This almost always happens. A debt adviser will be able to go through all your debts with you and confirm whether they will be written off in bankruptcy.
Also do you think I’d need to pay an ipa?
It sounds to me as though you don’t have much spare money to pay to your debts so you may not get an IPA. But a good debt adviser will be able to look at your actual numbers and give you a more accurate answer.
Leanne says
Thank you so much Sarah x
Andy says
I am being asked to sign an IPA for a lot each month – £700+ – as well as sell my equity. If I reduce my income so that I have less than £20 per month disposable income and prove this for the remaining 6 months of my bankruptcy then will I;
A – have to sign based on the income of the first 6 months?
B- get charged with a BRO or something similar?
C- get my employer in trouble for accepting my request to reduce my hours? I’ve told them I have some personal reasons, to be fair they haven’t asked anything more.
This is causing me some concerns, the amount over 3 years is significant and won’t help me get back in my feet after a failed business.
Sara (Debt Camel) says
I think you need to talk to a debt adviser about the specifics of your case and your possible options. I can give general guidelines but they are not something that you can rely on here. I suggest you talk to National Debtline on 0808 808 4000.
Baz says
Hi Sara,
I have just been discharged from my bankruptcy. However, I am subject to an IPA – £33 a month. I have just had a pay rise, not much, but obviously this will be added to my IPA. I’m currently lodging with a friend who has decided to sell the house. This means I will be homeless quite soon after lockdown is lifted. My rent is likely to be much higher as will need to rent my own property. My question is:
Would it be likely I could get an IPA payment break and a hold on any increased payments while I pull the money together for deposits and new home purchases, as I will be starting from scratch again?
Also, if my rent and other expenses are going to be much higher, is it likely they will stop my IPA payments? I’m not sure whether to wait and move, and then inform my OR of new circumstances, or is this a risk I shouldn’t take? I’m just concerned they won’t allow a break and ask me to increase payments, which will render me homeless.
Thank you in advance
Sara (Debt Camel) says
I suggest talking to the OR now. It may help if you have a letter or email from your friend saying that the house is being sold so you need to be prepared to leave within the next few months.
If you rent and other expenses are a higher after your move, your IPA will be reduced, possibly to zero.
Is there anyone that could act as a guarantor for you when renting?
Baz says
Hi Sara,
Thank you for the quick reply, really appreciated. I have a family member that would be happy to act as guarantor, its just the initial funds – even with the recent ban on agency fees its still a stretch.
My case is now with a trustee, not sure if they would be more or less sympathetic? I feel it’ll be unlikely to get a letter from my landlady/friend, she gets very nervous about financial issues; but I’ll approach the subject at the ‘right’ time.
Thinking ahead a little, is there anywhere I can access an upto date living expenses example sheet – one that gives exceptable totals for each section – rent, bills, leisure etc..? I never know how much I can put in each, which I feel burdened me with an IPA in the first instance.
Thanks again
Sara (Debt Camel) says
Those figures are Top Secret :(
If you post your budget on https://forums.moneysavingexpert.com/categories/bankruptcy-living-with-it you may pick up some helpful comments on it.
Baz says
I thought that’d be the case :-( Cheers for the tip though!
Thanks for all your help! Take care
Cherry says
Hi, I have gone bankrupt but when will the IP be in touch. The official receiver said a week and a half but that was 3 weeks ago. I am due to go on maternity leave next week and struggling with pain. After a year I intend to go back to work. Will they wait until I go back to work before they set up a IPA? I went bankrupt in August and will go back to work at the end of September.
Many thanks.
Sara (Debt Camel) says
Quite soon I would have thought.
Given your health, you could phone up and say you would like the OR interview to be as soon as possible.
Make sure you tell the OR what you pay will drop to on maternity leave at the start and then later on.
An IPA has to be set up in the first year before you are discharged, so the OR cannot wait until you are back at work.
Writer says
Hi. I have been declared bankrupt, IPA was set up but only from my NT tax code.
My question is: is it fair not to get any wage rise till I will be discharged?
Not. Sure how to act for a promotion at work when IPA will take all my extra money for next three years…and in the middle of that time a will not pay for Nursery that much so again I will pay for IPA more
Sara (Debt Camel) says
A lot of people decide to earn as little as they manage on in the first year of bankruptcy so they are discharged without an IPA (the NT tax code only is not a proper IPA). Once you are discharged, no IPA can be sat up so you can earn as much as you want.
Writer says
Is it sensible to talk about that with boss at work? Not to give me any rise as it is usually like a 50 a month
Or is it stupid or illegal?
Or better not to share my problems with company and struggle for 3 years if proper IPA will be set up.
Sara (Debt Camel) says
I was talking about whether you should apply for a promotion or a different job paying more.
If you are being given a normal small cost of living rise, then often this won’t make much difference to the IPA decision as your expenses will have gone up too?
In many workplaces these are automatic and you can’t really ask to stop them. It wouldn’t be illegal, but I can see why you might not want to talk about this at work.
If you want to know how close you might be to getting an IPA, you could post about your situation on this forum where there are a couple of good debt advisers who often reply: https://forums.moneysavingexpert.com/categories/bankruptcy-living-with-it. They like you to post full details of your income & expenditure using this form https://www.stoozing.com/soa.php which has a “format for MSE” button at the bottom.
Writer says
One more question.
Only IPA from my NT code was applied.
I have gone bankrupt 5 months ago.
How likely are they going to put me on IPA before I am discharged?
If they will do that just before I am discharged it would be kinda harsh…
Sara (Debt Camel) says
You can ask your OR’s office if one is being considered. But even if one isn’t at the moment, if your income increases in the rest of the bankruptcy year, one could still be imposed.
Writer says
Im afraid to as
let sleeping dogs lie
I don’t want such a thing as if u are asking then we implement one…
I don’t expect my circumstances to change anytime before discharge, but I can expect my circumstances to change in about 2 years…and if I will have IPA I will have to pay large(for my family) amount each month
Sara (Debt Camel) says
did you post on MSE about a possible IPA?
CJ says
How much spare income would result in an ipa I have 13 pound spare ish
Sara (Debt Camel) says
£13 spare after you have paid all your debts?
It can be hard to judge this. If all your income is from benefits, you will never have to pay an IPA. One thing that may help posting on this MSE forum where there are a couple of good debt advisers who often reply: https://forums.moneysavingexpert.com/categories/bankruptcy-living-with-it. They like you to post full details of your income & expenditure using this form https://www.stoozing.com/soa.php which has a “format for MSE” button at the bottom.
Sean says
Hi Sara,
I’m in a real bind and would love some advice. I’ve racked up around 80k debt, including a 35k second charge mortgage. All of this has been the result of trading cryptocurrencies and failing – trying to trade my way out of it. I see bankruptcy as the only option now, but i fear i will fall under ‘reckless speculation’. I have a few questions if you wouldn’t mind?
– We both earn around £1600/month, if we move into a flat, our total outgoings will be around £2k per month, leaving a fair chunk of excess. If i am forced into an IPA, will they be taking £1200 per month for 3 years, or only MY excess £600/month (after total expenses of say £1k each).
– Given that i may fall into the reckless speculation category, i may be liable for a BRO/BRU – will the consequences be similar to the above, except with the potential for 6 years+?
– My girlfriend has been paying all of our living expenses for a major portion of the year, this would show that my actual expenses are near
zero, with almost all of my earnings being lost on trading. If we enter an IPA/BRO, can i still put on the form that my estimated living expenses is say £400/month, even though this won’t ring true on my bank statements?
– Finally, when i submit my bank statements to the OR, will these be discussed with my individual creditors, or does the OR simply use them for evaluation? Thanks so much.
Sara (Debt Camel) says
i may be liable for a BRO/BRU – will the consequences be similar to the above, except with the potential for 6 years+?
A BRO does NOT mean you pay an IPA for longer. See https://debtcamel.co.uk/bankruptcy-restriction-order-bro/
when i submit my bank statements to the OR, will these be discussed with my individual creditors
No.
Do you own your place jointly with your partner? Is it in negative equity?
When are you thinking of moving?
Sean says
Hi Sara, thanks for your reply.
Its just owned by me, and it’s in positive equity (worth about 160k, 100k mortgage remaining, 35k second charge).
Probably in the next couple of months, loan arrears will become a serious issue soon. I’ve kind of accepted the fact that i’ll lose my house, i’m just really worried about potentially having to pay a monthly fee for bankruptsy for 3 years. RE the financial information i mentioned in my last comment, what sort of level do they typically go after? i.e 95% of excess earnings over your fundamental living costs, or just a percentage?
Also RE my partner paying for our expenses comment, where do you think we stand in that regard?
Thanks,
Sean
Sara (Debt Camel) says
ok, are you making any payments to any of the unsecured debt at the moment?
(I do get around to answering your questions in the end but I ned to see more of the picture first.)
Darrell says
Hi Sarah,
My wife and I are about to file for bankruptcy but cannot find much information on budget amounts to work by.
Do you have a form of sorts that possibly lists allowable amounts for your budget
Sara (Debt Camel) says
No, that form is Top Secret – daft but true…
Two options for you. Talk to National Debtline about this and how much each of you should put on your Bankruptcy Application form as expenses – this has the big advanatge that you will also get proper debt advice on whether bankruptcy is the best options for both of you.
Or post the MSE bankruptcy forum https://forums.moneysavingexpert.com/categories/bankruptcy-living-with-it with a Statement of Affairs>MSE like you to post a Statement of Affairs formatted from this website: https://www.stoozing.com/soa.php. There are some good debt advisers who post on mSE so you will hopefully get some feel for the amounts you have put in.
Emma says
Hi Sara,
I’m Considering filing for bankruptcy. I have about £26k debts and have been out of work for nearly a year to covid. I’m self employed.
My question is would bankruptcy stop my seiss payments from the government. They are currently my only source of income as I don’t qualify for universal credit because I live with my bf and his income is higher than the thread hold.
Thanks
Weatherman says
Hi Emma
I’m not entirely sure how SEISS payments are affected by personal bankruptcy, so I would contact Business Debtline for advice on that: https://www.businessdebtline.org/ It’s always a good idea to get advice before you go bankrupt in any case!
If it does mean your SEISS payments stop, and your boyfriend’s earnings are so high that your household doesn’t qualify for any Universal Credit, then as you say, this would leave you without any income yourself. That’s not ideal, but is your boyfriend likely to support you in that situation?
Bob says
Hi there. I sadly had to go bankrupt in August of last year. I have not heard anything about an IPA at the moment. They said it was unlikely as I’m on maternity leave. However, if I go back to work after the date of my end, can thry claim an IPA so if I go paid at the end of a August for example? Or thr end of September? Can thry set one up before that date to go out in the future?
Weatherman says
Hi Bob
One year after the date you become bankrupt, you’re discharged (except in specific cases – as you’ve not mentioned any extension, I assume that’s not relevant!). If you receive income after that date, it won’t affect your bankruptcy as long as e.g. you didn’t ask the company to artificially delay payment.
If you were paid in, say, July (or earlier in August than your discharge date), then you might be subject to an IPA or IPO. As I understand it the Trustee has some discretion over this, but I don’t know what would be normal practice in that situation.
Bob says
Thank you so much for getting back to me. Mine is complicated as I inherited a derilict house and share a house with my partner so it has been passed to an insolvency practitioner. I just don’t know when they will mention about an IPA. Do they leave it until the last minute to do it. I am looking to go back to work in August but can choose a date. I just wouldn’t want to get paid in August and then it create an IVA as this has been going on so so long. Also does anyone know after a house has been valued by a company employed by the insolvency practitioner how long it takes to work out thr equity. They said a few months back they were waiting on the mortgage company but I don’t know what this means and my anxiety is so so high over it.
They have said they don’t want to sell the house at all costs and understand that my partner might be able to buy my share but what happens and when will this be offered as I don’t want to drag this on any longer and worse for the house to increase in value. At the moment there is not much equity. Can thry stop my partner buying my half for 3 years? So so much to worry about and what is the mortgage company refuse? Thanks in advance.
John L says
When do the trustees put you in an IPO. I have 6 months left and nothing been mentioned for me yet. I want to go back to work after the discharge as I’m off work now. Can it be set up to take money after discharge?
Sara (Debt Camel) says
An IPO has to be set up before your discharge. All you can do is sit around until then :(
John L says
Thanks, Sara. So if it finishes mid August, can I go back to work in August and get paid at the end of August which is pay date or will they just make me enter one knowing I was going back to work. Even if I go back to work my finances areso tight but I just don’t want to end up in that situation as they have already taken the house.
Sara (Debt Camel) says
Thats seems to be cutting it a bit fine. You might feel more comfortable waiting another month.
John L says
OK thank you for that. Also I have been on a NT tax code since September. Does that mean I’m already in an IPA? It appears to be returning to normal afterwards in April.
Sara (Debt Camel) says
No, that is just a way that the official Receiver gets some of the tax you should have paid. It only lasts for the rest of the current tax year so yes it does go back to normal in April
John L says
OK thank you. I’m slightly worried I am supposed to be saving to pay my NT but I have not. I assumed they took it out automatically. Will I be getting a bill for the tax soon?
My work have informed my I have got a small bonus from work but I’m scared that I will trigger an IPA, I don’t know how much it is but I’m thinking about £50.For the last 2 months of my bankruptcy I won’t receive any income. Can they still set one up then? I’m on a limited income at the moment as it is.
Sara (Debt Camel) says
Ask your OR’s office about the tax.
I doubt a £50 bonus will matter – but it’s a windfall, not extra income so by itself it wouldn’t trigger an IPA
Will M says
Hello
My wife and I went bankrupt in October 2019, so we have now been discharged but we are still subject to IPA payments for another 8 months. I was made redundant in Sept 2020 so our IPA is zero at the moment but we have paid over 30k already.
However, we have no savings but need money for our daughters wedding later this year.
A friend has offered to lend us 10k but we are concerned that the OR will demand some or all of this when we put it into our bank account. Can the OR claim money if it is a loan (or even a gift) from a friend?
Thanks
Weatherman says
Hi Will
Because you’re already discharged, the OR shouldn’t have anything to do with this money – whether it’s a loan or a gift. It’s not ‘income’, so not relevant for the IPA.
If you’re still concerned, one option could be for your friend to gift or loan the money directly to your daughter. That way you’re not part of the transaction at all. But you shouldn’t have any issues here.
Will M says
Thank you so much for your reply. I feel a lot more comfortable with the situation now.
Your time and effort to respond are both very much appreciated.
Jane says
Hello, I became bankrupt last year and because there, were, assets we had a IP. Thry said they did not want to sell our house and its been valued but we have heard nothing more. My husband paid the deposit and the mortgage and bills from the beginning and we remortgaged at one point to cover some of my own then bills. There is 15k of equity but will he have to buy me out as he thinks I had had all my money out of the property. Can he argue his case? We just want this over and move on with out lives but he doesn’t want to contact them as he says it is for me too but I’m struggling with severe anxiety. I don’t want to lose out family home as we have young children and they said they didn’t want to sell it.
Thanks on advance.
Jane
Weatherman says
Hi Jane
If both your names are on the deeds for the house – as it sounds like they are – then the equity in the property currently ‘belongs’ to the insolvency practitioner. If they do want to sell the house, they have 2 years and 3 months from the date of your bankruptcy to start to do this. If they don’t start to sell the house by this point, they can’t, and after another 9 months the property will return to you.
If they’ve already told you they don’t want to sell your house, this is unlikely to happen, but I know that even the slight possibility of this can be stressful.
Your partner could buy your share of the property from the trustee. Because the trustee currently ‘owns’ the equity, he would need to contact them and buy it from them, not from you. You would need to make sure that you were happy with that, because it would mean none of the equity belonged to you any more, and you wouldn’t receive any of the money your partner paid for it.
I hope that helps & makes sense, but if you need further advice, you can call National Debtline on: 0808 808 4000
Claire says
Hi. My husband is considering bankruptcy and is concerned that the amount he pays towards our living expenses will be considered too high. I do not work currently and receive a small pension which I top up with some of my savings for contribution towards household expenses. I have an inheritance left by my parents and I own our house. I loaned him 17k 16 months ago and have not received anything back from him yet. He owes about 16k on credit cards and has a car on pcp which he will have to pay £4650 for them to take it back. Am I likely to have to use my savings to bail him out or will I be advised to sell the house?
Sara (Debt Camel) says
Did your husband contribute any money to buying the house? Has he been paying the mortgage?
John says
After my expenditure being reviewed by the OR, I’ve just been informed I will not be subject to an IPA (thankfully). Is there a possibility the OR could ask for evidence of my expenditure up until the point of discharge? The reason for asking is I know I was close to having an IPA and I’m worried that I have prove at some point the same amount on specific items I’ve declared. I’ve certainly not lied about my income/expenditure, but I may spend more in some areas and less in others but still being pretty much the same amount of expenditure overall. Also, if there was a surplus income by the time of discharge do I have to declare it? (I have 9 months remaining until discharge. If there is any surplus, it will be an extremely low amount). Thanks..
Sara (Debt Camel) says
What you spend your money on isn’t monitored and you are unlikely to be asked any more about it. The OR doesn’t care if this month you spend more on clothes and food and next month you spend less on them but pay your road tax.
Until you are discharged, you need to inform the OR if your income increases or if your expenditure will always be lower in some area – eg if someone else moves in with you and so the bills are shared. After your discharge you don’t have to do this if an IPA has not been set.
John says
Hi Sarah, your advice has brought huge comfort to me and I’m sure to many others too.
The question: I was bankrupt in Feb but I’m still getting texts and letter from a couple of the creditors to requesting I pay up, acting like they are not aware I’m bankrupt, despite me telling then directly (as well as being informed by the OR). Is this normal – can I formally complain? It’s not good for my mental health.
Also, is there a point where all the owed credit will stop showing in the relevant credit accounts? I’m obviously not using them anyway so not a big problem but it would be good to see it all cleared. Thanks
Sara (Debt Camel) says
It’s normal for a few weeks, until the creditor updates their systems. But they should have done this by now – who are the creditors?
Your credit records won’t be changed to show zero owed until you have been discharged after a year.
John says
The two culprits are Barclay and Halifax. They both claimed they were not informed of the BK. I agreed to Barclays request a few weeks ago to ask the OR to send the letter again to another of their addresses (their Legal Notices dept), which the OR did. Halifax has since acknowledge receipt of the notification of BK, however they will put a 30 day hold on the account and expect me to contact them in 30 days to update my status. I’ve just received the text (after 30 days) asking me to contact them again. I’ll still be BK, so why should I contact them, do I have to?
Sara (Debt Camel) says
The easiest thing is to contact them and repeat that you are bankrupt. Tell them you will make a complain if they continue to ask you to repay.
Paul says
Dear Sara,I have spent a lot of time on these pages about bankruptcy and they are well written and in line with what the charities (CAP, Nat. debt line & StepChange) I have spoken to have advised, wanted another opinion however. I have no assets of worth, and £52,686 in exclusively non-priority debt (bank loan, credit cards, and family and friend loans). At least £18k was added in debt in the last 13months
Due to my salary being decreased by 20% for over 13-months now because of Covid, I am still supplementing my monthly support to my girlfriend & her family who lives overseas who have lost their jobs to Covid. This part of the debt was accrued in this manner via credit-card cash transfers, as my normal salary is being taken up by minimum credit card payments (never missed, no court action taken) I do hope my financial situation (salary income) changes in the next 12 months, but for now, I cannot keep up with minimal payments, and a debt repayment plan is saying it will take me 7 years to pay off. With Covid being the fault of my salary deduction, in the last year kept dipping back into them whilst needed extra money for my (and gf’s families outgoings – I used to be able to cover this on my salary pre-covid). Difficult to say how to OR will deal with this, but I know they don’t take emotional consideration into this factor, but they do take personal indiv reasons. If the OR told me I need to cut all payments (from salary) to my GF and her family who are based overseas, purely because they are not in my household and we are not married, this would be detrimental to my relationship, as they are really counting on my support during this period, but I don’t see any way out for now. . If the OR says the payments need to be cancelled and the support is “non-essential expenditure” and this relationship then suffers because of it, then I am left thinking what was all this debt worth, for when the chips were down, and my only option being a 7year debt relief plan… I am hoping a bankruptcy sees me through a shorter term of a future of uncertainty, BUT doesn’t mean my monthly support for my loved ones ceases. Thank you!
Sara (Debt Camel) says
your girlfriend and her family – does this include any children you are the father of?
If not it seems very unlikely this will be seen as “essential expenditure” by the OE.
“a debt repayment plan is saying it will take me 7 years to pay off”
This is allowing for you to carry on with the transfers abroad? If it is, isn’t this then a good option for you? And if your income goes up, it will be paid off in under 7 years?
Paul says
Hi Sara,
Thank you for your speedy reply! Much appreciated. No, the children are not mine but her younger siblings. I know if we had children or married this would be a different scenario, I just wondered given the circumstances and the fault of covid that maybe it would be considered. The debt management plan is allowing for this option, and I do see your point, I just knew both carried the same financial ruin, but one seemed to offer a quicker way to be debt free (and save for a future), but the decision needs to be based on the security of my monthly support.
Sara (Debt Camel) says
Marriage isn’t really relevant here. You want to give money to people you regard as family who are not living in your household and who are not actually legally dependent on you instead of paying your creditors. An Official Receiver is not likely to think that is reasonable. The OR won’t stop you doing it, but it will not be treated as an allowable expense, so you are likely to find it very difficult to pay the OR the monthly IPA and have enough left to live on and also send the money abroad.
Jay says
Hi,
Thank you for great advice and answers to queries on here!
Please can I ask:
1) During the 3 year IPA how often is your payment amount to be re-assessed (to increase / decrease without the bankrupt prompting the change)?
2) When a review of the IPA is carried out, is a full assessment conducted in the same way as the income and expenditure review with the OR (including challenges to you living expenses)?
3) How frequently will items such as wage slips and bank statements have to be submitted during the 3 years?
Thank you in advance!
Sara (Debt Camel) says
Have you gone bankrupt? If you have, has an IPA been set? What sort of job do you have , does the pay vary a lot?
Jay says
Hi Sarah,
Yes I’ve been declared bankrupt and an IPA has been agreed. I earn the same basic each month where overtime is possible, but I am opting not to pursue. Due to this my pay won’t change other than inflation pay rises.
Thanks
Sara (Debt Camel) says
Quite right to stop all overtime. This is a mad system the Insolvency Service uses where you would lose all the overtime payments, but it is what it is, so why should you work hard and get no benefit whatsoever.
You are legally obliged to inform them if you have a pay rise. You can also inform them if your expenses increase – rent, bills etc. These may offset an income rise or they may exceed it, in which case your IPA should be reduced.
Obviously you don’t want to contact them every month if the gas bill goes up £6. But any large increase should be reported. And it’s worth looking when you do get a pay rise how your other expenses have gone up.
To answer your questions – the OR/Trustee can make whatever enquiries they want, but from what you have said I would expect your IPA will pass peacefully. The OR (or Trustee) has no interest in wasting time checking up what is happening if your pay is static each month. They want the right amount of money rolling in with as little work as possible from them, not to harass you or monitor what you are spending your money on.
Jay says
Thanks again Sara, you are a great help to many people in these misfortunate circumstances.