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| williamb |
Posted - 17 January 2009 : 15:15:44
Hello, My question(s) is this - after bankruptcy do you have to make payments to creditors out of your income and if so how long would that be for and how may the size of payment compare with an IVA ? thank you. |
| 3 L A T E S T R E P L I E S (Newest First) |
| John |
Posted - 18 January 2009 : 14:34:58
Hi
within the bankruptcy documentation you will need to complete there are questions regarding household income and household expenditure.
The answers to these particular questions and the examiner's acceptance, or not, of them will dictate whether or not you will be required to make payments after declaring bankruptcy. Payments are known as an Income Payment Agreement or IPA.
Having allowed no more than the essential expenditures the examiner deems you require, you must have a minimum £100 disposable income left per month for him to propose an IPA. On £100 DI per month the OR would claim £50 of it.
There are a number of professional firms that could help with this but you should consider whether you actually need that level of help or not.
For a firm to complete your paperwork and give full guidance in the completion of them the fee would likely be in the region of £500.
Many on this site will tell you that it's better to do this yourself. Alas some of them will no doubt be paying into an IPA that could have been avoided with the right help.
If I were you I would get the forms and list the expenditures as requested then look at the household income. To ensure you have claimed all that you should and no more, and to make yourself aware of what benefits etc are included as income and which are not you can just use the forum, many have.
Once you are aware of the true monthly DI figure you will then be able to calculate if you are likely to have an IPA proposed or not.
If it's clear that you will not then job done.
If it looks like you may be a border line case, only then should you consider a professional service as they may well be able to tip the balance in your favour. Bearing in mind that an adjustment by a professional, if required, could well avoid an IPA which at £50 per month minimum is a potential £1800 saving over 3 years.
www.Bankruptcyhelp.org.uk
0800 078 9367 |
| williamb |
Posted - 17 January 2009 : 18:45:41
Hi John,
Thanks for your reply - seems pretty conclusive as income would be same and virtually no assets to lose. Is there always a repayment set by the court ? Is it best to get a financial adviser to manage it all and how much could I expect to pay for that ?
William
quote:
Originally posted by John
Hi
assuming the household income figure is the same in bankruptcy as in IVA, the allowances for expenditure in bankruptcy are a little more generous.
Also, once your disposable income is calculated, in IVA you pay 100% of that sum on a monthly basis for 5 to 7 years. In bankruptcy you pay 50% to 70% dependent on the amount for a maximum of 3 years.
Also, if your circumstances change in IVA and you can no longer afford the initial payment, it's possible but not simple to obtain a variation and lower the monthly amount payable. But if the lower sum is not acceptable to the creditors then you may fail the IVA and if you do then you will owe the full original sum even after paying for 4 years or so.
In bankruptcy if you can no longer pay due to a change in circumstances then you just don't pay.
Once the 3rd anniversary of the start date of your payments in bankruptcy arrives then you pay nothing from that date irrespective of how much you then earn.
www.Bankruptcyhelp.org.uk
0800 078 9367
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| John |
Posted - 17 January 2009 : 15:24:50
Hi
assuming the household income figure is the same in bankruptcy as in IVA, the allowances for expenditure in bankruptcy are a little more generous.
Also, once your disposable income is calculated, in IVA you pay 100% of that sum on a monthly basis for 5 to 7 years. In bankruptcy you pay 50% to 70% dependent on the amount for a maximum of 3 years.
Also, if your circumstances change in IVA and you can no longer afford the initial payment, it's possible but not simple to obtain a variation and lower the monthly amount payable. But if the lower sum is not acceptable to the creditors then you may fail the IVA and if you do then you will owe the full original sum even after paying for 4 years or so.
In bankruptcy if you can no longer pay due to a change in circumstances then you just don't pay.
Once the 3rd anniversary of the start date of your payments in bankruptcy arrives then you pay nothing from that date irrespective of how much you then earn.
www.Bankruptcyhelp.org.uk
0800 078 9367 |
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