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| Debtdummy |
Posted - 23 March 2007 : 17:42:15
Part 9 - IPOs CONTESTED INCOME PAYMENTS ORDERS
December 2006
31.7.70 Action to be taken where the application for an IPO is contested
Where a bankrupt contests that he/she is able to make payments of the amount sought by the official receiver, he/she should be questioned as to why this is the case, the amount having been calculated from information provided by the bankrupt and the reasonable domestic needs of the bankrupt and his/her family having been considered when assessing income and expenditure (see Part 2 and Part 7 of this chapter). Likely reasons for the bankrupt objecting to the IPO will be where the official receiver or trustee has sought to disallow part of the mortgage repayments claimed by the bankrupt (see paragraph 31.7.63), or where the bankrupt's outgoings are considered extravagant or excessive when compared with the guideline expenditure provided in the Family Expenditure Survey and guidance provided in this chapter at Part 2 and Part 7.
Where the official receiver/trustee remains satisfied that on the evidence available, the bankrupt has sufficient surplus income from which to make an income payments contribution after meeting his/her reasonable domestic needs and those of his/her family, the bankrupt's agreement to an IPA should always be pursued in preference to obtaining an IPO. However, where this agreement cannot be obtained IPOs should be pursued.
The official receiver/trustee may suggest to the bankrupt the areas in which the disputed expenditure is considered unreasonable or excessive, but if the bankrupt refuses to accept that the expenditure is unreasonable, the trustee should continue with the (disputed) IPO application and rely on the court to adjudicate on any disputed matters when deciding whether the bankrupt should be subject to an IPO.
31.7.71 "Stepped" or "Staggered" order
The court can if necessary make a "stepped" or "staggered" order. This type of order requires the bankrupt to begin making payments with immediate effect but also allows the amount of the payments to be increased at a later date, e.g. three months after the order is made. Usually the circumstance where the court would consider an order of this type would be where the official receiver considers that part of the mortgage repayments should be disallowed because they are unusually high or because they include an element of arrears. During the (e.g. three month) period where lower payments are made by the bankrupt, he/she, would be expected to come to an arrangement with the mortgagee to accept lower mortgage repayments or to find alternative accommodation.
See also paragraph 31.7.63 regarding excessive mortgage payments.
31.7.72 General review prior to obtaining an IPO
If necessary the official receiver may seek to vary the amount sought at the time of his/her application, where perhaps the bankrupt's income has increased or decreased since the original assessment of the contribution amount available for an IPO.
[Back to Part 8] [On to Part 10]
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