If your assets aren’t enough to pay your bankruptcy debts, you might have to make monthly payments from your spare income. This arrangement lasts for three years.
Your trustee will need details about your income and expenses, including your partner’s or any family members who depend on you. This information will help your trustee decide:
- if you can afford monthly payments
- how much the payments will be
- how many payments you will make
Your trustee will try to reach an agreement with you about your monthly payments. This type of plan is called an Income Payments Agreement (IPA). If you can’t reach an agreement, your trustee will ask the court to order you to make monthly payments. This type of plan is called an Income Payments Order (IPO). You should get legal advice if you are taken to court.
How much are you likely to pay?
Any spare income over £20 per month can be used to pay the IPO/IPA. The actual amount will depend on how much you can afford after essential expenses like food and bills are paid.
Payments are unlikely if state benefits are your main source of income or you have less than £20 a month in spare income.
The amount you pay can be changed or stopped if your financial situation changes. For example, you inherit money or lose your job. You must keep up the payments or face court action.
