IPA Question

[Skippy]

Everyone knows how much the cost of living is increasing at the moment, and at the moment Dave and I managing. Dave is self employed and at the moment is still getting work, however it worries me that people aren't going to want him as having your house decorated isn't a priority in recession!

My question is, if his income does drop, would the OR consider reducing my IPA to help us manage? I have no interest in the house, other than that I don't want to end up homeless due to not being able to pay the bills!

[chris.g]

When we went br and the OR was including hubby's working tax credit in the income, I asked what would happen if and when the benefit was reduced. The OR told me that they should be notified of ANY change of income as the IPA would need to be reassessed. It's definately worth getting in touch as times are getting tougher and there's no need to sruggle needlessly,
xx

[Skippy]

I was worried because it was only me going BR I might not be able to ask for my IPA to be reassessed if Dave's circumstances changed - I don't want the OR to think that I'm supporting him.

[ianmillington]

Hi Skippy

By virtue of Section 310A(6) Insolvency Act 1986, the IPA can be varied either by written agreement or by application to Court by either the OR or the Bankrupt (assuming the 2 sides can't agree!)

Clearly agreement is preferable. If Dave can demonstrate that his income has gone down but his expenses haven't then the OR ought to be receptive to a variation of the IPA, given that Dave would be able to apply to the Court. If an application did have to be made the Court would then look at the basic IPO principle of not making any order that does not allow retention of sufficient money to properly meet basic domestic needs.

Make sense?

Ian

[Skippy]

Thanks Ian!

I am a bit confused about one thing (I am easily confused so bear with me!) - why would Dave apply to the court as it's my IPA? He's not bankrupt, it was only me. My main worry is that Dave's income will drop and my IPA will mean I can't contribute any more, and if I ask the OR they will say tough, it's Dave's problem!

It's all hypothetical at the moment so fingers crossed it won't come to that and we'll manage but it's something that's always at the back of my mind with the way things are going in this country at the moment. Luckily he does a bit of everything - decorating, plumbing, electrics, carpentry.

[ianmillington]

Arrrrrhhhhhhhhh!"£$%^&*(

I should read a bit slower.

The basic principle is the same. You can apply for variation of the IPA if need be. A provision of an IPA takes effect as if it were a provision of an IPO (S310A(2) IA 1986). Section 310A(7) goes on to say that the Court shall grant a variation if it is necessary to avoid the effect in Section 310(2). That section says the Court won't grant an IPO if to do so reduces your income below the amount you need to meet the reasonable domestic needs of yourself and your family.

Thus, if due to circumstances outside of your control your obligation to contribute to the household budget increases, you have grounds to ask the OR to vary the IPA.

Sorry to get a bit technical but on occasions it is necessary to refer to the law and I feel this is one, esp if you need to put your case to the OR.
ian

[Skippy]

Thanks Ian, I understand now. I'll keep this information to hand and contact the OR if need be. The last thing I want is Dave to start running up credit cards and overdrafts!