I was just wondering if a bankrupt becomes subject to an IPA/IPO would he/she only ever be subject to losing in the terms of an IPA/IPO between 50-70% of whatever disposable income was left after essential expenditure? E.g. If your disposable income was £200 per month you would lose between £100 and £140 of it? Interestingly, if you started earning a lot more whilst undischarged than you were earning at the date of the bankruptcy order, say, £2000 disposable income per month would you then lose between £1000 and £1400 per month or would it somehow end up being the case that the Official Receiver would take even more? Does the principal hold if you start earning an astronomical £20000 per month. Would you then be subject to an IPA/IPO of £10000 to £14000 per month.
What I am asking is: if you go bankrupt is there no incentive to try to better yourself whiulst bankrupt because you might lose all your disposable income at some certain level of income or does the 50 to 70% of income always hold?
You are correct in your calculations, however if your disposable income were to increase to such a level this would change the structure of your insolvent position, therefore you may well be advised to propose a fast track IVA and pay your debts in full via the IVA.
IPA/IPO Revisited
Posted - 11 April 2008 : 11:22:28
