The monthly update on the start of the Fifth month of bankruptcy.  Very little to report really.  I had a few more computer generated letters earlier in the month of October from the car finance people, but they were passed straight onto the Insolvency Agency to deal with.  Another company has bought a debt from a credit card that I had and they wrote to me saying that I had to contact them “immediately” to enable them to open my account with them … The company, Cabot Financial, were (like the last one) researched and found to be another debt collection agency who have bought the debt at a tiny fraction of the cost, but were still requesting the full amount from me.  I have passed this to the insolvency Agency once again and as per the law, I have not entered into correspondence with them; neither will I.

ROBIN.

The car has finally been taken away.  A non contentious collection had been discussed and agreed with the finance company months ago, but they stupidly passed the collection of the car to an enforcement and asset recovery company.  This particular company called the Burlington Group “Excel” (their website reports) in vehicle recovery.  They could have excelled much more if they would have bothered to simply call me and arrange a time and date to collect the vehicle along with its logbook, manuals, service history, locking wheel nuts, manufacturers paperwork from new, alarm codes and the actual keys; but no, they just dragged it onto a low loader and removed it from private land, without either my or the finance companies permission.  I called the finance company and they were apologetic and informed me that they had instructed the Burlington Group to collect the vehicle – NOT to repossess it !  4 damaged alloy wheels later and with no keys, logbook, manuals, paperwork, locking wheel nuts or service history, the vehicle has lost a lot of money for them.  I have since spoken to the finance company who are not happy with the Burlington Group at all, as the vehicle is now at an auction house in the East Midlands with no history or equipment.  I was in two minds whether or not to return the missing items but because they took the car with some of my personal belongings still languishing inside, without asking and it turns out they did it illegally, I gave the auction house nothing but a key when I had to repatriate my favourite Cd’s, phone charger, First Aid kit and fire extinguisher, a wind up radio, an Ethiopian Airways blanket, a deck chair, a can of Red Bull, a bag of winter clothes, a toothbrush, £7.41 in coins and a bar of soap (don’t ask).  Lets see if they ring me up for the other bits they might need.  I left the compound it was stored in with a sad face as that particular car was the best vehicle I have ever owned.  It meant a lot to me as I purchased it with the intent of a family vehicle for my Ex partner and I, and just after both my parents had passed.  It was meant to signify a new start and the start of my own  family, and leaving it looking dirty and scratched in a vehicle compound of an auction house just showed me that I now have to start all over again.  Goodbye Robin and thank you. – Only my Brother will know why I named my car that.

RESEARCH.

I carried out further research last month into IPA’s (no not Indian Pale Ales unfortunately) and IPO’s. Income Payment Arrangements and Income Payment Orders.

An IPA is an arrangement that you enter into voluntarily to pay back some of your creditors and an IPO is an Order made upon you for the same reason.  Now, I knew these existed and I was fully aware of them prior to signing the dotted line, but the law is tricky around when they can be started and why.

You can only enter and IPA or IPO if you have disposable income.  If you are on benefits or a very low wage with no disposable income for instance, the courts and Official Receiver (OR) will leave you be.  Start earning money however, and they will be knocking on your door.  An IPA or IPO can only last for three years.

IPA.

The big questions are – When can an IPA be requested and when can an IPO be ordered? The law states clearly that an IPA must be entered into within the bankruptcy period and prior to discharge.  So provided you cooperate fully with the Insolvency Agency and your bankruptcy automatically ends with discharge and is not extended for any reason by the Official Receiver, then provided you don’t sign anything to agree to an IPA – you’re home free, so to speak.  UK legislation states :-

IPO.

But what about an IPO?  When can they order you to pay back?  If you earn good money after you are discharged from bankruptcy, can they order you to start paying then?  This is where it gets slightly more technical.  There are two sets of rules here and both must be consulted.  The Insolvency Act of 1986 and the newer Insolvency Rules of 2016.  The Insolvency rules were brought in to supplement and clarify the old Act.  Chapter 11 (above) of the 2016 rules covers the IPA, as this was brought in to allow the use of voluntary payments without clogging the courts with a need for official orders and their associated paperwork etc.  The 1986 Act however was ‘old school’ in that, it details the IPO from a time when the courts were not clogged with red tape and rubbish and there were indeed enough people to man and manage them; and the Government hadn’t sold off all the Grand Court buildings to Arabian property investors to turn into flats.

The IPO is different.  The creditor(s) can apply to the Official Receiver, who in turn apply to the Courts for the IPO against you.  They are directed to always try an IPA first, but once they (the creditor via the OR) have applied to the Courts – the IPO process is started. So here is the tricky bit.  The 2016 Rules and the 1986 Act ALMOST say the same thing.  The 1986 Act states that the ‘application’ has to be instituted before you are discharged from bankruptcy, if it is not instituted prior to discharge, then it can never be followed up.  They tricky word is “instituted”.  Instituted means in laymen terms, that the application has been legally lodged with the courts.  So – as long as they (the creditors via the OR) apply and it is officially lodged with the Courts prior to your bankruptcy discharge, you may then be made to pay for three more years.

See 310 1A below.

This is what I am sure that the two debt collection agencies that have bought the debts from my original creditors will do next.  As long as they request an IPA, which in my unemployed state I will naturally decline as I have nothing but £73 per week to live on, then I’m sure they will then lodge an IPO hoping that I find work before my insolvency is discharged.  As long as it is lodged – they can claim.  This then begs another question.

My next research is to find out how I can find out if someone (anyone) has Lodged an IPO against me with the courts.  If I can find this out, I won’t have any nasty surprises toward the end of my bankruptcy.  I would presume that the pre cursor to an IPO application would have to be an IPA request.  It also raises the possibility of lodging the IPO anyway and seeing if my circumstances change – how long can they wait?  Can they do that or is an application specific?

An example:-

• Bankruptcy to end on the 1st of December – unemployed.  If the creditors lodged an IPO with the courts on the 30th of November would it just sit there ready to ‘spring’ into force if, lets say, a job was found on the 2nd of December that paid well?  Or is an application specific to that one single attempt?  When the application was made, I was unemployed and had no income, even though later I found a good paying job.

The legislation states that notice of an IPO has to be issued to the bankrupt person at least 28 days before the hearing date.  (See below 10.109 (2))  So, I surmise that provided a further 29 days have gone by AFTER you are discharged … an IPO can not have be lodged with the court, and if it has, legislation would be broken if you received the notice of the IPO 29 days later.  This however begs yet another question … If the application is for instance lodged on the 30th November, (from the example above) how long will it take for them to inform you that you have 28 days to the hearing.  Could it technically sit with the courts (lodged) for 12 months, then they give you 28 days notice of the hearing… therefore a year AFTER your discharge you could end up going to an IPO hearing?  All for this months research.

It actually says that the trustee (the OR) has to deliver it to the bankrupt, but I’m sure that would include just a dated letter as opposed to putting it physically in my hand.  So, to be double sure – I shall now make my bankruptcy a self imposed 13.5 months instead of 12. (the extra 15 days is for possible mail delivery of an IPO notice) If there has been nothing heard after 13.5 months, as I used to say when taking classes of Soldiers in the Gymnasium as a Physical Training Instructor in the British Army, I shall – Carry on normal jogging.

The entire situation also raises another question – is it worth gaining employment that may give me expendable income prior to my discharge?  Surely, if I can hang on ‘on the Bread Line’ for another few months, I can ensure no payments will have to be made to these debt collection agencies.  It is the only reason I can think of as to why they would purchase the debt in the first place.  Put the IPA and IPO in, and see if they can get something (anything) back.  To them, it’s probably worth the paperwork and time.

“Praemonitus, praemunitus”

….As they used to say in the Roman Empire.

Important note.

If you are reading this with bankruptcy either in mind or have already declared, please ensure you carry out your own legal research into this guidance.  I cannot be held accountable for any misinterpretation I have made of UK law surrounding Insolvency.  This is purely for guidance, it is not necessarily fact.