Paying towards your debts after you go bankrupt
While you’re bankrupt, you might be asked to make payments towards your debts if you have money left over after you’ve paid for the things you need. The things you need are called ‘essentials’ and ‘reasonable living costs’.
You don't have to pay any money towards your bankruptcy debts during the bankruptcy period if either:
your only income is benefits
you have no spare money to pay towards your debts
You might still need to make payments for debts that aren’t part of your bankruptcy - for example, child maintenance or student loans. If you’re not sure what you need to keep paying, check which debts bankruptcy covers.
Check what counts as reasonable living costs
You only have to make payments if you have money left each month after you’ve paid for essentials and reasonable living costs.
Essentials are things like:
rent or mortgage
energy, phone and internet bills
house or car insurance
Reasonable living costs are things like:
The person who decides about your payments is called the ‘official receiver’. They have to consider your views about what is 'reasonable' or necessary spending for your circumstances.
If you’re not sure whether a payment counts as essential or reasonable, talk to an adviser. The adviser can’t decide if something is essential or reasonable, but they can help you work out what the official receiver might decide.
If you have to pay towards your debts
The official receiver will give you an ‘income payments agreement’ (IPA). The IPA tells you what you need to pay. An IPA usually lasts for 3 years.
An IPA usually means you have to make regular monthly payments towards your debts, although you could also be asked to make a one-off lump sum payment.
The official receiver might change your IPA if your income or expenses change - for example if you start earning more, inherit some money or have a baby. The official receiver might:
pause your payments
increase or decrease your payments
tell you to make a one-off payment
If you can afford what the official receiver suggests, it’s usually best to agree to the IPA.
You can ask the official receiver to change the IPA if:
you think it’s wrong - for example if they haven’t included a payment you think is reasonable
your circumstances change and the official receiver hasn’t changed the IPA
If you want to change the IPA
Who you should contact depends on who you make payments to.
If you pay the official receiver directly:
Telephone: 0300 678 0016
Monday to Thursday, 9am to 5pm
Friday, 9am to 3pm
Your call is likely to be free of charge if you have a phone deal that includes free calls to landlines - find out more about calling 030 numbers.
If you pay Advantis:
Telephone: 01782 971 404
Calls usually cost up to 55p a minute from mobiles and up to 13p a minute from landlines. It should be free if you have a contract that includes calls to landlines - check with your supplier if you're not sure.
If you’re not sure who to contact, check the letter that told you about the IPA.
Tell them why you can’t afford the IPA. For example, if they haven’t included a payment you think is reasonable, explain why you need to keep making the payment. Tell them what you can afford.
If you’re not sure whether to challenge the IPA, talk to an adviser. Tell the adviser when you need to reply to the official receiver or Advantis. If the adviser can’t give you an appointment before then, ask the official receiver or Advantis to give you more time so you can get advice.
If you can’t agree with the official receiver
You or the official receiver can ask the court to change your payments. The court will make an income payments order (IPO). If you have a salary, the IPO will take payments straight from your salary.
The court might decide you should pay more or less than the official receiver decided. They might also tell you to pay the legal costs if they agree with the official receiver’s decision.
If you need a hearing urgently
Tell the court if you need the hearing urgently – you can tell them before or after you apply for the hearing. Email the court at firstname.lastname@example.org – in your email, make sure you tell them:
what you need the hearing for
why the hearing is urgent
who needs to be at the hearing
how long the hearing’s likely to take
how long the judge is likely to need to read through the documents before the hearing
If you don’t know all of this information, tell the court in your email.
The hearing will normally be by video call using Skype for Business. If you can’t use Skype for Business, tell the court if you can use other video call software or if you want your hearing to be over the phone.
You’ll still have to apply for the hearing when the court replies to your email.
If you get a letter about an income payments order (IPO)
If the official receiver applies for an IPO, you’ll get a letter from the court telling you about a court hearing. You'll be given at least 28 days' notice of the court hearing.
You can either:
agree to the IPO, which would mean there won't be a court hearing
oppose the IPO, meaning you'd have to attend the court hearing and explain why you oppose it
If you agree to the IPO, you should tell the official receiver and the court at least 5 working days before the court hearing. You can use the forms the court sent with the letter about the IPO.
Talk to an adviser to help you work out what to do about the IPO. Tell the adviser when you need to reply to the official receiver. If the adviser can’t give you an appointment before then, ask the official receiver to give you more time so you can get advice.
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