If you have at least £20 over each month after you have paid for all your essential living expenses, the Trustee may claim some of this as payments towards the bankruptcy.

If your main or only income is state benefits or a state pension, then it is unlikely you will be required to make payments.

The Trustee claims the surplus income by means of a IPA or IPO.

Income Payments Agreement (IPA)

An IPA is a written agreement between the Trustee and the Bankrupt. It is a binding agreement that states the Bankrupt will make payments towards the bankruptcy for a specified period.

Income Payments Order (IPO)

An IPO may be sought through the court if a Bankrupt won’t agree to a proposed IPA. If necessary, the court can arrange for an Attachment of Earnings Order to take the money directly from your employer or get benefits stopped.

IPO’s/IPA’s can last for up to 36 months which can continue after discharge from bankruptcy.

You may be required to make payments from any income, including pensions, towards your bankruptcy.

What happens if I miss an IPA/IPO payments

If you miss a payment you will be required to provide an explanation and arrange for arrears to be paid. If the problem is longer term, for example due to a drop in income or a necessary regular expense, the Trustee can reassess the situation.

The Trustee may decide that an IPA/ IPO is no longer appropriate and you are therefore no longer required to make payments. However, if this happens you must inform the Trustee if your surplus income rises again.

If you miss payments, and do not contact your Trustee about any difficulties, the Trustee may apply to the Court for an order suspending your discharge from bankruptcy. The Trustee can also take steps to recover the money you owe.