New Bankruptcy Laws

Anybody heard of this - I hadn't. It seems to have been kept very quiet.

Bankruptcy: Is there life after debt? | Money | The Guardian

£10 per month per person in your household for luxuries for three years, essential living expenses (defined in article) and the remainder of your disposable income to go to pay of any debt.

That is a BIG change!

[leclerc]

Re: New Bankruptcy Laws

Links are in the article:

IPO / IPA

The other document says this:


Changes to the way Income Payments Agreements (IPAs) and Income Payments Orders (IPOs) are made

From 1st December, 2010, two main changes came into effect:

• the minimum amount that the Official Receiver (OR) seeks to claim under an IPA or IPO reduced to £20 a month.

• the bankrupt no longer retains any of the remaining surplus income once all their reasonable household expenditure is accounted for.

Existing IPA/IPOs will continue under the present arrangements as will any subsequent variances throughout their lifetime.


Changes to the way in which the family home is dealt with

From 1st January the following changes came into effect:

The OR, as trustee of the bankruptcy estate, will no longer dispose of a bankrupt’s interest in a family home until two years and three months after the bankruptcy order is made, except if an offer is received which is in the creditors’ interests to accept.

At two years and three months a review will begin. In cases where the bankrupt’s interest in the property is valued at less than £1,000, steps will be taken to re-vest the property interest in the bankrupt.

Otherwise, if there is insufficient equity to attract an insolvency practitioner to act as the trustee of a bankruptcy estate, then enquiries will be made as to whether the bankrupt or a third party would be interested in purchasing the interest, assuming the property interest may be worth more than £1,000. If it is not possible to transfer the interest, and the interest is valued in excess of £1,000, the OR will consider applying for a charging order.

If there is sufficient equity in the property, and if the OR is not aware of any willing purchaser, a Secretary of State appointment of an IP trustee may also be sought.

The OR has the discretion to effect an early re-vesting of the property back to the bankrupt in specific circumstances.


Below is the leaflet about bankruptcy
When will my bankruptcy end?

[Curlyben]

Re: New Bankruptcy Laws

TBH that's about how I always thought it worked.
Hand over the excess monies after normal expenses are incurred.

Strikes me as more than fair.

[Caspar]

Re: New Bankruptcy Laws

I agree it's fair, but you used to be able to be discharged after one year.

There are also some strange anomalies in it. i read it a couple of days ago, but if my memory serves me correctly it allows you £960 for a family holiday each year. Now if you decide you don't want a holiday, can you still get that money to spend on things for yourself or does it go to creditors?

I also think there may be (I'm not sure) a discrepancy between what a court allows on your IE form and what you are allowed when made bankrupt.

[Nibbler]

Re: New Bankruptcy Laws

You are still discharged after one year.

An IPA runs for up to 3 years, including after you are discharged, but you are still discharged after 12 months.

That was the case before the recent policy changes, and it is still the case now.

On holidays, there used to be a rough guideline figure on what might be considered reasonable. Although you were never always given that allowance regardless.

This seems to have been taken out in that latest guidance to case examiners, and instead it states just states that expenses for a reasonable family holiday should be considered on a case by case basis. If necessary, the examiner can ask for evidence of the expense to be provided.

[Nibbler]

Re: New Bankruptcy Laws

I also think there may be (I'm not sure) a discrepancy between what a court allows on your IE form and what you are allowed when made bankrupt.

What exactly do you mean?

The I&E that you submit on the debtor's statement of affairs should be the same as that to be used for an initial assesment of whether an IPA is appropriate. The court doesn't allow or disallow things on that.

Or do you mean what the court might allow if the were assessing CCJ payments? That and an I&E for an IPA calculation are not for the same thing. One is assessed by the court, and the other is looked at by the official receiver. They aren't required to use the same criteria.

Oh. And these changes are not "new laws". They are just changes in internal guidelines/policy by the Insolvency Service. They were always allowed to be this strict under the existing legislation, but they had a policy of not being so. Now they have tightened up.