What are IPA Payments

[marcia]

I have come to the sad realisation with the help of Tina that Bankruptcy is the way we will need to go in order to sort ourselves out financially or go under. I thought when you went bankrupt you did not have any surplus and therefore you cannot make payments to anyone.

So what is an IPA payment and it sounds as if it is just as bad when you go bankrupt trying to pay people off. I thought after a year if you have surplus money when the year is over, its all over. But if you do not have any surplus as in my case then you are declared bankrupt and that is it.

Is this not the case?

[aguise]

Hi Marcia
I will do my best. I think it is an income payments agreement. It is the amount of your disposable income that the Or thinks you can pay for three years, that is if you have enough in his or her opinion left from your I and E. Usually it is between 50% and 70% of your disposable income.If you have no surplus then you will not get one.
I am sure skippy or Kerri will put me straight if i have got it wrong, but saw you had been waiting a while.

Ang

Please visit my blog at http://aguise.blogs.iva.co.uk/

[marcia]

Thanks Aguise

I did think it rather strange that it took so long for someone to answer this post. On my other one I got several answers quite quickly. You are right I looked it up on the Insolvency Service in the end. We do not have any surplus left at the end of the month, but by all accounts although you pay nothing, if you have no money, the bankrputcy still has lasting and far reaching consequencies. Although you can be discharged in 12 months you can still be liable years down the road. I thought once they saw that you have no money that they would declare you bankrupt right away, no credit for 6 years (which who would want to take out again) and then you could try to start again.

Even those who pay the IPA or IPO (which they take straight from your pay so your employers would know about it) it still does not mean its over in a year and then they write it off whats left, it can go on for 3 years and then they might not discharge you after that either. It sounds like no matter what you do, you never really settle this issue.

We do not have any equity in our property in fact we have negative equity, so we hope we can keep our home but who knows it sounds like everything is subject to seziure once you go down this road, which I do understand at the end of the day. But had thought going down this road would bring closure once and for all but it does not really appear that this is the case.

[aguise]

Hi again Marcia
I think it will bring closure even with an ipa it is only for the three years and then that is it. Credit takes as long to restore itself as an iva and who really wants it anyway.
I really hope you keep your home ,with negative equity you should be ok. I think the only time it carries on for longer may be if you have a BRO I am guessing again but I think it is a bankrupcy restriction order which is if you have done something wrong, these cab go obn for years. Try not to worry. The main thing is that you are addressing the debt and you will be free of it because you want to. Until your meeting with the OR there will be a lot of uncertainty but hopefully it will go well for you.

Ang

Please visit my blog at http://aguise.blogs.iva.co.uk/

[mish1953]

Marcia,

Iam BR and have an IPA ... hey this is just like alcholics anonymous.

yep its hard, I'm also losing my house as well as having an IPA .. but it will end . Aye it will screw your credit rating up for 6 years, but you can recover it gradually once your discharged - personally I dont want or need a credit rating as I never intend to have credit again.
Most are auto discharged after one year, and if you dont have an IPA then it'll be pretty much done and dusted at that point. Its very rare to get your discharged extended nowadays - you have have to upset the OR to go beyond a year .
The only time that they will take money directly from your wages is if you fail to pay an IPA or IPO by the normal route . They dont even tell your employer. BUT your tax cose will go down to zero until the end of the tax year and your employer will notice that.

Its not all doom and gloom, sure its not easy but at least you dont have any debt any more .

PS - I didnt answer 'cos I didnt see it .

Slainte
Mish



Will an automatic discharge hurt.

[marcia]

Thank you all for your response. Will keep you informed. Waiting to lay it all out for my husband as we never thought it would come to this. We thought we would be able to do IVA and deal with it that way Bankruptcy is a real wake up call but it has to be done.

[Skippy]

Sorry I didn't answer your post - I STILL haven't got internet at home so I can only answer when I'm at work, which obviously depends on how busy I am!

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[wen]

I might add, that I used to be a Subpostmaster for the Post Office and because I was self employed I didn't pay tax on my PO Salary (My tax code was NT), and I declared everything at the end of the year on my tax return and paid the tax then... so not everyone on a NT Code is bankrupt!!

Just tell them that Inland Revenue wants you to do Self Assessment and has NT'd you -- that's even if anyone would ask you, which they really shouldn't!!

[caraf]

Hi Marcia
Did you apply for an iva in the first instance. How come you have ended up going bankrupt.
What is your debt ?

[marcia]

Hi Caraf

When Tina helped me figure out my monthly outgoings and everything we need to take into consideration we realised that I was in the hole about £100 every month, so no extra income left over, which means we are not good canditates for IVA. Only other alternative is bankruptcy. Believe me I am still trying to come to terms with it all. I am still trying to figure out if we can cut back on things drastically could we find a way. But there is no point being unrealistic because if we try to do an IVA and then discover we cannot manage we are back to bankruptcy again. Plus the whole idea is how will you cope with absolutely nothing to fall back on ....we been falling back on credit won't be able to do that any more. We owe between hubby and I £78,000.

[Adam Davies]

Hi
You are doing the right thing.
Five years is a lifetime on a tight budget and if you make it too tight you will simply not make it further than a few months.
Good luck

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[BrassicLintus]

Hi Marcia, just wanted to say that i was in the same boat as you no so long ago. I too was up to my neck in debt and was desparate to enter into an IVA, but realistically I didn't have enough surplus. I tried to juggle my figures to "fit" but the reality was I had left myself a miniscule amount to live on - and there was no way I could have managed for 5 years. So i filed for BR in August. I too have negative equity so the OR asked if I would be interested in a 3rd party buying back the beneficial interest for £1 - you also have to pay the OR's solicitor fees (around £211 I think). I am currently in dispute as to whether I should be paying an IPA. The OR says yes (as he based my surplus income on some overtime I had worked) - I say no as after all my expenses and on my basic wage (which I've earnt since going BR) I'm left with about £50. It's good that you sought professional advice - but now it's down to you as to what course of action you take next. But if you have any questions - there'll always be someone on here who can help! Good luck with whatever you decide to do.

Sam

[marcia]

Thanks Sam for those words. As I look into this situation deeper and deeper, there is absolutely no simple way of sorting this huge problem with all the will in the world. As you say I have sought professional advice, done a lot of reading about the siutation and as you rightly point out at the end of the day my hubby and I will have to sit down and decide the right course of action for our family. My greatest concern is keeping a roof over my very young childrens head. If it was just my husband and I the we would take the very very drastic measures I think that would be necessary but unfortunately with children in the equation, you have to be very careful about what decisions you make because it could impact on them the most.

The situation is getting to the point where I feel consumed by it all and you are unable to take pleasure in anything just constantly worrying the whole time. But I know in the next couple of weeks major decisions will have to be taken and lived with too!.

[BrassicLintus]

Hi Marcia, I think all of us on the forum can identify with the way you're feeling - it seems like there isn't anyway to turn and you think of nothing else. I won't pretend that BR is easy or is the answer to all your problems - in some ways it's just the beginning - it will affect the rest of your life. But if you have negative equity then you have no reason to lose your home so at least your children won't be uprooted. I'm 3 months into my bankruptcy and things are still up in the air, although I don't dread the postman anymore!!!! It is a relief to know that I'm free to start my life again - this time definately WITHOUT credit!!! But I still get niggling feelings and pangs of guilt because I feel that I still owe the money and always will - I wonder if they'll ever go away? If over the next couple of weeks you have any questions or queries (or just want a sympathetic ear - or should that be eye?!), I'm sure all of us on the forum will do our best to help. Best wishes.

Sam