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Income Payments Agreement

When a Trustee in Bankruptcy or the Official Receiver is appointed over the estate of an individual following a Bankruptcy Order, all property of the debtor vests in them (this means that, for all intents and purposes, the property of the debtor becomes the property of the Trustee and they can deal with it – usually by valuing and selling it). This will include income from a job, or investment income, or royalties, etc.

An Income Payments Agreement (IPA) is a contract, the terms of which are enforceable as though it were an Income Payments Order (IPO). The agreement sets out how much the Bankrupt must pay into the insolvent estate on a regular basis and for what period. The latter is usually a period of three years.

The agreement is made between the Bankrupt and the Official Receiver or the Trustee in Bankruptcy and is instead of it being ordered by the court.

The IPA can extend beyond the discharge of the Bankruptcy, which is usually 12 months from the date of the Order, and up to three years from the date of the agreement.

[See ‘Trustee in Bankruptcy’, ‘Official Receiver’, ‘Bankruptcy’, ‘Bankruptcy Order’,‘IPO’ and ‘Income Payments Order’.]

Income Payments Order

When a Trustee in Bankruptcy or the Official Receiver is appointed over the estate of an individual following a Bankruptcy Order, all property of the debtor vests in them (this means that, for all intents and purposes, the property of the debtor becomes the property of the Trustee and they can deal with it – usually by valuing and selling it). This will include income from a job, or investment income, or royalties, etc.

An Income Payments Order (IPO) is awarded by the court and is an enforceable contract, setting out how much the Bankrupt must pay into the insolvent estate on a regular basis and for what period. The latter is usually a period of three years.