some of you will know I have been posting seeking advice on my IPA dillema. After talking to a local IP I was advised that every monthly IPA payment does not go directly to the creditors, first 17% is deducted for administrations costs by the RTLU or OR. Is this correct? Can anybody shed light on this?
as always its not quite that simple. It works like this. on average every bankruptcy costs the OR £1715 to administrate (this may seem like alot but compare it to an IP, solicitor or accountant). Of that you pay a deposit of £450 when you go to court. This leaves £1265 to be paid. Now the OR has to take all cases from the courts, they dont get to choose like IP's do. So if there are no assets in your case then then the Insolvency service makes a loss on that case. If you do have assets then the first part of any money collected goes to pay the shortfall in your case. Once your case is fully paid an SOS (secretary of state) fee applies as a percentage of what is remaining. This was 17% until Aril last year, it is a little more complicated now but broadly in line with that. The SOS fee goes into a pot and pays for all the cases that make aloss from their own assets
OR & RTLU keeps 17% of each IPA payment
Posted - 11 February 2011 : 07:39:08
