Income Payment Agreement Allowances
If you miss IPA payments, you will be contacted to find out why. You are supposed to make unpaid payments or accept a change in the money paid monthly (based on a new review of your finances). If you do not agree, the official recipient may decide to take the matter to court for further action. If you do not accept it, the court could make a profit payment order (IPO). If the liquidator is already subject to an IAP/IPO and receives lump sum funds, the PPI may be amended to recover the lump sum as a one-time payment in addition to existing monthly payments under the PPI, see item 31.7.175 and schedules B and C attached to this chapter amending an IAP or IPO after lump sum payment. If you have been declared bankrupt and you also pay taxes under PAYE, HM Revenue Customs (HMRC) will generally apply a “zero tax” code for the remainder of the tax year. Thus, shortly after bankruptcy, your employer is responsible for not collecting income tax on your wages for the rest of the fiscal year. This is not the only reason HMRC applies zero control code, so your employer will not necessarily know that you have been declared bankrupt when they can assume so. Code Zero does not mean that the tax is not due, but allows HMRC to claim the full amount of unpaid tax for the year of your bankruptcy. Because of the lack of income tax, you have additional surpluses, and this may be the basis of an IAP or an ipo — in fact, that money saved may be the only money you will have to pay in a zero PPI or IPO, and therefore the order would cease if the tax code goes down. If you have surpluses other than tax savings, the monthly amount paid under the PPI or IPO decreases when your tax code changes. If, after bankruptcy, the liquidator receives a backlog of benefits (and receives other income (earned), the official beneficiary may include the payment of arrears of benefits as a source of income in the calculation of income.
If the bankruptcy trustee has a sufficient surplus (from unredified income) by integrating the benefits, an IAP can be agreed.