Income Payments Orders (ISCIS)

Income Payments Orders (ISCIS)

December 2010

Introduction

1. What is the purpose of an Income Payments Order (IPO)?

One of the aims of bankruptcy is to relieve a debtor of unmanageable debt problems. A consequence of this is that the bankrupt, who no longer has to make payments to the majority of his/her creditors, may have a surplus income beyond that needed to meet the reasonable domestic needs of him/herself and his/her family. Any surplus income payments can then be paid into the bankruptcy estate. To address this point, section 310 of the Insolvency Act 1986 provides that the trustee can apply to the court for an order that the bankrupt (or his/her employer) make regular payments from his/her income into the estate from any ‘surplus’ income. Such an order is known an Income Payments Order (or IPO). The order can be obtained with or without the consent of the bankrupt.

The Enterprise Act 2002 (EA2002) extends this idea by introducing the Income Payments Agreement (IPA) to run alongside IPOs. IPAs are entered into voluntarily however, there is a formal binding agreement between the official receiver and the bankrupt that the contributions will be made. In effect, the IPA works in the same way as an IPO but removes the need for the official receiver or trustee to make an application to court.

It is envisaged that in the majority of cases where the bankrupt has income in excess of expenditure, an IPA will be obtained in preference to an IPO, which should only be sought in those cases where the bankrupt does not consent to the proposed IPA or does not co-operate with the official receiver.

For further information see Case Help Manual part: Income Payments Agreements (ICSIS).

2.What are the terms of an IPO?

An application for an IPO can only be made by the official receiver as trustee i.e. after the no meeting notice has been issued or after a first meeting where no insolvency practitioner was appointed and where the case is deemed suitable for an IPA but the bankrupt refuses to consent.

An IPO can only be made on an application which is submitted to court prior to the bankrupt’s discharge.

As with an IPA, the period of the IPO must not exceed three years but may extend beyond the period of discharge. The specifics must be included in the application and be incorporated into the order.

3. How are such cases identified? (amended April 2012)

The bankrupt should in all cases answer the questions regarding income and outgoings which appear in either the statement of affairs in debtor’s petition cases, or the B40.01 (PIQ B) preliminary information questionnaire (PIQ) in all other cases. Both documents ask for details of the bankrupt’s income and normal monthly expenses such as rent, food, heating and lighting, clothing etc. and should be completed before interview and where requested, supporting evidence provided such as payslips and utility bills. To assist in calculating the proposed IPO contribution, reference can be made to the IPA/IPO calculators (available on the Technical Section intranet page).  It may be that the initial information provided is sufficient for a decision to be made that there is no surplus income and no further action is then required in respect of the bankrupt’s income. 

As with an IPA, an IPO should not be sought, where the effect would be to reduce the income of the bankrupt below the level considered adequate to meet the reasonable domestic needs of the bankrupt and his/her family, not just their basic domestic needs.

It should be emphasized that the bankrupt should provide details of all sources of income, which includes state benefits, pensions, contributions from a spouse/civil partner/partner and contributions from other members of the household. This list is not exhaustive and every case should be treated on its merits. Further detailed examples of various sources of potential income can be found in the Technical Manual (TM 31.7) Part 3 and accessed from the table below. 

Section

Income type

Paragraphs

(a)

Employment and self-employment (including foster care income)

31.7.33 to 31.7.39

(b)

State benefits

31.7.40 to 31.7.43

(c)

Arrears of benefits received post bankruptcy

31.7.44

(d)

Pension receipts

31.7.45 to 31.7.52

(e)

Periodic payments in respect of loss of earnings/personal injury/redundancy

31.7.53 to 31.7.55

(f)

Income arising from capital property (including rents) and mortgage payment “holidays”

31.7.56 to 31.7.58

(g)

Tax refunds and reliefs

31.7.59 to 31.7.62

(h)

Income arising from nil tax (NT) coding

31.7.63 to 31.7.70

(i)

Income received from spouse/civil partner/partner

31.7.71 to 31.7.73

(j)

Income from adult children and other adult members of household

31.7.74

(k)

Maintenance payments income

31.7.75 to 31.7.77

(l)

Student loan income

31.7.78 to 31.7.79

4. How much can be claimed under an IPO assessed after 1 December 2010 ?

From 1 December 2010 in all new IPOs where the bankrupt’s surplus income is £20 or more, official receivers will seek the full amount of any surplus income, by way of monthly payments under an IPO. As the official receiver is seeking to recover the full amount of any surplus available to the bankrupt, it is important to emphasize that in assessing a bankrupt’s surplus income every situation will differ and each case is considered on its own merits. A provision of £10 per person, per month, will be included in every assessment for the individual and each dependant household member, to cover sundries and emergencies.

Where the bankrupt is self-employed, a fixed monthly figure may not be appropriate for the IPA as income may be variable. The IPA will have to be tailored to meet the individual circumstances of the case and should be reviewed regularly to allow for fluctuations in income. See TM 31.7.35-31.7.37 for further guidance.

5. What if there is an existing IPO ?

Existing IPOs (in place on 01 December 2010) will continue under current arrangements includingany subsequent review or revision of those arrangements following a change in circumstances. Where the IPO was agreed before December 2010 and is reviewed after that date, the percentage scale calculation will still apply, in the same way as when the IPO was originally calculated. The only exception to this is where the surplus income on reassessment is less than £50 but equal to £20 or more, then a revised IPO will be sought for the surplus income above £20 or more.

6. What if the bankrupt is in receipt of state benefits?

An IPO should not be sought where the bankrupt’s only source of income is state benefit payments. 

If the bankrupt is in reciept of benefit and other income, and has surplus income above that required to meet his/her reasonable domestic needs, the official receiver should stillconsider the possibility of obtaining an income payments order. Any calculation to identify surplus income should include all available income, including state benefits. 'State benefits' refers to all forms of income supplement and support provided by central or local government including,but not limited to :- income support, job seeker's allowance, disability living allowances incapacity benefit, council tax benefit, housing benefit, state retirement benefit, child benefit and all forms of tax credit (child, working and pension). It is the income from the sources other than the benefit(s) which is providing the payments under an IPO, so if the bankrupt is in reciept of benefits and has surplus income, an IPO contribution should only be sought from the non-benefit element of the income. Examples of calculations and the adjustments to be madewhere the bankrupt is om receipt of benefit income can be found at TM 31.7 Annex A. (See also TM 31.7 Part 3 Section (b) and (c). 

If a bankrupt who is solely in reciept of benefits has surplus income and has agreed to contribute on a voluntary basis, no enforcement action can be taken if the bankrupt fails to make agreed vluntary payments, and a voluntary payment cannot be enforced via an IPO. 

7. What can be deemed as reasonable expenditure? (amended April 2012)

A consistent approach should be taken to those items that may, or may not, be allowed when considering whether the bankrupts expenditure is reasonable. An assessment should be made as to whether the outgoings are realistic, relevant and appropriate to the bankrupts circumstances and whether outgoings included are sufficient to provide for the reasonable domestic needs of the bankrupt and his/her family. The Household Expenditure Spreadsheet (HES) is available for various household groups, based on the most recent Office of National Statistics (ONS) figures. There are also further guidelines issued by ORBS available HERE.   Detailed guidance for particular types of expenditure can be found in the TM 31.7 Part 4 and can be accessed from the table reproduced below. The list is not exhaustive and all expenditure claimed must be considered according to the individual's personal and family circumstances.

Section

Expenditure type

Paragraphs

(a)

Accommodation costs

31.7.82 to 31.7.91

(b)

Communications

31.7.92 to 31.7.93

(c)

Education (including student loans)

31.7.94 to 31.7.106

(d)

Employment, self-employment, tax and pensions

31.7.107 to 31.7.109

(e)

Entertainment, sports, leisure and social

31.7.110 to 31.7.115

(f)

Family and household

31.7.116 to 31.7.118

(g)

Family maintenance payments

31.7.119 to 31.7.120

(h)

Healthcare

31.7.121 to 31.7.123

(i)

Motoring and travel costs

31.7.124 to 31.7.125

By way of example, the following gives a brief description of some common items of expenditure which may need to be considered:

Items such as TV licence, household and car insurance and car road tax (where the bankrupt has been allowed to retain the vehicle) may be treated as part of the bankrupt’s domestic needs.

Mobile phone costs must be reasonable and it may be necessary to disallow part of the costs if they are excessive or mainly for social use. If the calls are largely work related, a check should be made whether the employer is reimbursing the bankrupt for those calls.(Section (b) above).

Broadband internet costs can be considered, where it can be demonstrated that the use is for more than purely social contact. (Section (b) above).

Items such as gym membership, private healthcare insurance and additional pension contributions to enhance a pension should not be treated as allowable unless there are extenuating circumstances.

An allowance for clothing may be included in the calculation. What is considered reasonable expenditure may depend on (for example) whether the bankrupt is required to purchase specific clothes for their employment. If the amount claimed appears excessive (with reference to the guidance figures provided relevant to their family circumstances in the HES), the bankrupt should be asked to provide an explanation and evidence as to why they require the extra allowance.

An expenditure claim for after school clubs can be allowed if they are used to provide childcare whilst the parents are working but if used simply for convenience, they cannot be considered as an essential expense.

8. The application.

(Amended July 2014)

Where an IPA cannot be agreed the trustee may decide to seek an IPO instead. However, the application to court can only be made once the trustee has been appointed and must be instituted (made) before the date of discharge. The trustee should contact the appropriate court (at least 6 weeks ahead) to fix a date and time for the court to hear the application (chambers hearing).

Once a date has been fixed, the official receiver must prepare a report (form IPORAC) and application to court. The bankrupt should be informed of the hearing date (form IPONA) and venue in writing, enclosing a copy of the report and application. A certificate of service [Form N215] should be prepared by the person who effects service, and filed in court (this is required to be done within 21 days of service having been effected).  A pre-filled version of the form is available to use from the ‘Forms to use’ section (form IPOCERT).  It is important that the certificate is completed in its entirety including the statement of truth. The bankrupt should be informed that there will be an opportunity at the court hearing to show why an order should not be made or why the terms of the order sought by the official receiver should be varied.   When making an application to court for an IPO, a fee (currently £155) is required to be paid (court application fee) as the application is being made as trustee. Where this fee is paid it should be included as part of the total funds to be paid under the IPO.

The bankrupt is also informed that he/she is required to attend the hearing unless at least 5 business days prior to the hearing he/she sends to the court and the trustee written consent to the order. In cases where the petition was presented before 6 April 2010 the written consent must be sent 7 days before the hearing.

9. What happens once an IPO is obtained?

Once made a sealed copy of the order (form IPO) is placed on the court file and a further copy must be sent by the trustee to the bankrupt (form IPO under cover of form IPOSV). The order will either require the bankrupt to make the payments, or require his/her employer (or other person regularly paying his/her income) to pay the amount due to the trustee out of the income due to the bankrupt. However, if appropriate, an order may be sought in the first instance directing a third party to make such payments .

If the bankrupt fails to make payments under the IPO,  the order can be varied seeking payments from the employer at source. Where the order directs a third party to deduct payments at source, a sealed copy of the order should also be sent by the trustee to that third party.

10. What are staggered or stepped orders?

These orders require a bankrupt to begin making payments with immediate effect but they allow for the amount of the payment to increase after a certain period of time e.g. 3 months. This type of order could be made where the bankrupt is deemed to be making excessive mortgage payments, for instance, and/or where the payments are being made by the bankrupt on behalf of himself and one or more other parties who have separate incomes and could be expected to make some sort of contribution to the mortgage payments. If the court agrees, during the initial 3 month period, for example, the bankrupt would be expected to come to an arrangement with his mortgagee (bank or building society, etc.) to make lower mortgage payments or find alternative accommodation. Such an order should not be sought however if it is likely to lead to the bankrupt becoming homeless.  

11. What is a 'NT' tax code IPO?

(amended January 2014)

When a bankruptcy order is made against an individual who is subject to PAYE, HM Revenue and Customs (HMRC) applies a “nil tax”(NT) code to that person for the remainder of the tax year in which they were declared bankrupt. HMRC can then claim in the bankruptcy for the amount of tax which would have been collected (plus any other money owed for previous years), as long as the debtor does not change his/her source of income (i.e. gets a new job) during the tax year in which the bankruptcy order was made.

Where the NT code is expected to be applied before the end of the tax year, the additional income arising as a result of the application of the NT coding, can be included when calculating the amount of the bankrupt's surplus income from which contributions can be collected under an IPO.

Once the NT tax code IPO is obtained HMRC, PO Box 1000, Newcastle upon Tyne, NE98 1WY, should be notified using form IRNTMB (letter to HMRC re nil tax coding) A signed TNIDIS (Tax and National Insurance disclosure form) in Word or pdf format, should also be sent separately to the HMRC e-mail account TNIDIS.ptopsbankruptcy@hmrc.gsi.gov.uk. The IRNTMB letter asks HMRC to forward notice of tax coding to the official receiver’s agents, Clarke Willmott, who will then deal with collecting the amounts payable. The official receiver should retain a copy of the TNIDIS form on file and a copy should be sent to HMRC at the above e-mail address.

It should be noted however, that in practice it can take some time to implement the NT code. If delays occur in adjusting the bankrupt’s code any overpayment of tax will take the form of a tax refund at the end of the tax year and can be claimed by using the bankrupt’s duly completed authority TNIDIS. This form authorises the payment to the official receiver/trustee of income tax refunds payable for the tax year in which the bankruptcy order was made. The tax refund must not be claimed as after-acquired property.

Applications for an IPO therefore, must take into account the amount of time available to process the fixing of any hearing and the amount of notice which is required to be given when making such an application.

For further information see TM Chapter 31.7 Part 3 section (g) and (h) and CHM part: Tax Refunds paragraph 5.

12. Can the case go to LTADT?

(Amended July 2014)

Once the IPO is effective, and if there are no other assets in the case that would merit seeking the appointment of a trustee, the case can be transferred to the appropriate LTADT, to administer the payment collection and monitoring, after instructions have been given to Clarke Willmott (see below). In those cases where the appointment of a trustee  is being sought, the official receiver should not neglect to take steps necessary to secure the payments under the IPA pending the appointment of an insolvency practitioner.

All cases transferred by OR offices to a LTADT are routed through the LTADT Central Operations Team (C.O.T.). Cases are re-assigned to the C.O.T team on ISCIS by selecting the RTLU Midlands option when transferring the case. A case should not be transferred to a LTADT until  all general administration actions and ISCIS associated notes are completed and the first IPO payment has been made. 

13. How are instructions sent to Clarke Willmott?

(Amended July 2014)

The current contract for the collection of monies due under an Income Payments Order is with Clarke Willmott.

Information on the service provided by Clarke Willmott and full guidance on using  their Debt View website is available on the Clarke Willmott intranet page.       

IPOs should be referred to Clarke Willmott using a corporate report (Clarke Willmott IPA/O Referral) which is uploaded to Debt View. This removes the time spent in offices manually entering data on to a spreadsheet and eliminates data discrepancies between ISCIS asset screens and the data we provide to our agent. The corporate report contains all the information Clarke Willmott require apart from the bankrupt’s employment details which should be added before the report is uploaded to Debt View.  At the same time copies of the sealed IPOs should also be uploaded. A designated manager from each Office/Command should upload the corporate report (Clarke Willmott IPA/O Referral) to Debt View on a regular, locally agreed basis. Within two working days of receipt of an instruction Clarke Willmott will set up in Debt View a separate record for each IPO and the record will be accessible by the case officer assigned to the case.        

There will be no paper confirmation via letter and all communication with Clarke Willmott regarding a case should be an instruction in Debt View. 

Detailed guidance on the IPO referral process is available on the Clarke Willmott intranet page link Referring IPA/Os

The following information will need to be appended to the instruction in every case:  

  • the name and court details of the relevant case, together with the name of the official receiver and details of his/her office
  • the name and address and contact number of the bankrupt
  • date of the bankruptcy order and the date and terms of the IPA
  • amount of payments and frequency of expected payments
  • date first payment due
  • the bankrupt’s employer’s details, if available

All this information will be supplied on the corporate report (Clarke Willmott IPA/O Referral) to allow Clarke Willmott to contact and set up the income payments. In the event of non co-operation it will also allow Clarke Willmott to trace or implement the payment via the bankrupt’s employer; reducing the need for further instruction.

14. Who do I contact at Clarke Willmott?

(Amended July 2014)

The case clerk who is the assigned case owner should send any instructions using the ‘instruct us’ screen on Debt View. If you have a case related query that you wish to discuss over the phone rather than through Debt View you can talk to one of the Clarke Willmott team listed on the contacts link from the Clarke Willmott intranet page.    

Where Clarke Willmott has been instructed on a case, the official receiver or LTADT office receiving an Income Payment query should refer the caller to Clarke Willmott using the contact number below;

Telephone: 08452091679.

Clarke Willmott provides an online enquiry facility for staff which allows owning offices full access to cases for monitoring progress, viewing payments received, to see all letters and case history and receive and send instructions via their Debt View website at https://.debtview.clarkewillmott.com. Each case in Debt View has an assigned ‘case owner’. In an IPO case this will be a case officer who has a login account and password to allow access.

Where the bankrupt has already started making payments to the official receiver direct, details should be passed to Clarke Willmott via the ‘payments’ screen on Debt View, so that these payments can be taken into account.

If the case is an NT tax coding IPO or there is an element of NT tax coding Clarke Willmott will be informed via the corporate report (IPA/O Clarke Willmott Referral), so that once the NT tax code has been applied the collection of payments can start as soon as possible.  

15. What if the individual defaults in making payments?

(Amended July 2014)

Clarke Willmott will ensure that a standard reminder letter is sent to any bankrupt who misses any payment within three days. If Clarke Willmott makes an arrangement for the bankrupt to make good missing payments and the bankrupt fails to adhere to the arrangement, Clarke Willmott must notify the official receiver within three days of the failure.

If an individual contacts Clarke Willmott to make him/her aware that there are temporary financial difficulties which in the opinion of the contractor will be overcome within two months, the contractor will have the discretion to agree the terms under which any missed payments are made good and to ensure that the schedule of payments is brought up to date without the need to refer the matter back to the LTADT.

If a bankrupt contacts Clarke Willmott to inform them of a more permanent change in their financial circumstances, Clarke Willmott will issue an IPOQ. Once received notification will be sent to the owning OR/LTADT office via Debt View. The completed form will be available to view online via the Debt View ‘case history’ screen. Reassessment is then performed by a member of the OR/LTADT office. Confirmation of the result of this reassessment is then returned to Clarke Willmott via the ‘Instruct us’ screen on Debt View.

Where a re-assessment indicates that a reduced IPO may be appropriate, the LTADT will prepare a report and an application to court to vary the IPO to seek a reduced amount or to seek  payment directly from an employer or third party. The LTADT will liaise with the originating official receiver for a court date. If the official receiver considers that it is appropriate to do so, he/she may attend the court hearing to be heard on the application but the LTADT will prepare and serve all necessary paperwork. Clarke Willmott must be advised of the hearing date and confirmation obtained regarding payments made up to the date of the hearing and provide such information as is deemed necessary in relation to any court application.

16. What happens if the situation cannot be resolved by Clarke Willmott?

(Amended July 2014)

Where any situation cannot be resolved by Clarke Willmott, the matter will be referred to the LTADT. If the LTADT is satisfied that an IPO is no longer appropriate, because of the loss of a job or substantial reduction in income, the LTADT will inform the individual that payments will be suspended until the situation improves, with a reminder that the individual must notify the LTADT if things improve before the term of the IPO expires. Once the individual is in a position to make payments again, the official receiver will issue fresh instructions to Clarke Willmott. The payments will continue from that point and no attempt will be made to collect the missed payments. If the circumstances of the bankrupt do not improve and no further payments are made, the LTADT will treat the IPO as having lapsed and no further action will be taken.

If the official receiver makes the decision to suspend collection under an IPO because of a change in the bankrupt’s circumstances, Clarke Willmott will be notified of that decision via Debt View within 7 working days and the matter will be deemed concluded.

It should be noted that although there is still an option to suspend discharge, this should only be considered in the most extreme cases.

17. Varying, reviewing or discharging an IPO.

An IPO can only be varied, reviewed or discharged by order of the court although either the official receiver as trustee or the bankrupt can apply to have the order varied or discharged. A formal application must be made to the court (form IPORAV) .The court can change the terms of the order (vary) or it can order that the order be discharged (ended). Any order made must then be served on the bankrupt and other interested party e.g. an employer.

If the bankrupt’s income was reduced making it impossible to maintain the payments then application could be made to the court to vary the amount to be paid or to discharge the order so that the bankrupt no longer has to make the payments.

Similarly, if the bankrupt’s income increases to such an extent that the trustee believes that he/she has more disposable income and is therefore able to pay more than the court ordered, application can be made to the court to review the order.

Where an application is considered because the bankrupt has not been making the payments, the varied order may state that the bankrupt’s employer should deduct the payments from the bankrupt’s salary and forward them directly to the trustee. The order also allows the employer to deduct an administration fee to cover his administration costs. Where a bankrupt is self-employed but there is one person for whom he/she normally works, application can be made for that person to make the deductions in the same way as an employer would. However, this approach should only be taken where the bankrupt cannot pay rather than will not pay as there is no desire to add to any tension between the bankrupt and his/her employer.

The court, if it thinks that "no sufficient cause is shown for the application", may dismiss the application. However, notice must be given before any application can be dismissed. See TM 31.7.169 for further details.

If the court does not dismiss the application a date and time for the hearing will be fixed and the applicant must give the other party at least 28 days notice of the hearing. If the official receiver is the applicant, a copy of his/her report must be sent to the bankrupt together with notice of the hearing. Where the application is for an IPO to be varied so that the employer makes the payments, the application may be made without notice to any other party.

18. Can the bankrupt’s discharge still be suspended?

There is no reason why the official receiver may not apply to the court for an order suspending the bankrupt’s discharge if he/she defaults, since such an application could encourage the bankrupt to get the IPO back on track. However, as a bankrupt will be discharged generally within 12 months of the date of the bankruptcy order, this may not be a particularly effective way of seeking compliance.  

19. What if the bankrupt is not co-operating ?

Further guidance will be issued in due course regarding enforcement remedies available to official receivers where the bankrupt or former bankrupt does not co-operate, both before and after discharge. In the meantime any matters of this nature should be referred to Technical Section.

20. Income review in early discharge cases.

In those cases where the insolvency order was made on or after 1 April 2004, section 256 of EA2002 allows the official receiver to reduce the 12 month period of the bankruptcy further, by filing a notice stating that an investigation of the conduct and affairs of the bankrupt is unnecessary or concluded. This process will only be relevant to those cases marked NFI (‘early discharge’) which have met the criteria set out in the CHM part : Discharge from Bankruptcy paragraph 4. Full instructions for the ‘early discharge’ process can be found there for cases which meet the criteria.

 

Notes

a Details of the transitional arrangements for any IPO in force as at 1 April 2004 can be found at TM 31.7.14 -17.

Where can I find out more?

Insolvency Act 1986

Section 310 and 310A.

Insolvency Rules 1986

Rule 6.189 - 6.193.

Income Payments Calculators and Household Expenditure Guidance -Technical Section homepage

Technical Manual:

Chapter 31.7 – Income Payments Agreements and Income Payments Orders

Case Help Manual:

Discharge from Bankruptcy

Income Payments Agreements

Tax Refunds

Technical Notices

Technical Notice T54-10 – ‘Revision to the way in which Income Payment Agreements (IPAs) and Income Payment Orders (IPOs) are sought’

ISCIS Protocols

Asset Recording

Standard Wording Guidance

Forms to be used:

(Amended April 2011)

IPORAC – IPO, Report and Application to Court

IPONA – IPO, Notice of Application

IPOCERT - IPO Certificate of Service 

IPO – Income Payments Order

IPOSV – Income Payments Order, Service on Bankrupt

IPORAV – IPO Variation Report and Application to Court

IRNTMB – Letter re Nil Tax coding

TNIDIS – Tax and NI Disclosure Authority  

 

IPO Flowchart  

 

Procedure

(Amended May 2011)

ISCIS tabs that must be used to record/view information are given in brackets e.g. (‘Docs’ tab).

1 Receive message from examiner to arrange a hearing date for an IPO application. The examiner will have identified whether the case is suitable for an IPO ( via a workflow) and recorded details within section 6 of the ‘Datastore’ tab in ISCIS.  Details of the amounts should be entered as a note on the ‘Assets’ tab within ISCIS using the standard wording guidance (see ISCIS Protocols).

2 Contact the court and fix a date and time for a hearing in chambers. This should be at least 6 weeks ahead. Diarise the date and note ISCIS(‘Hearings’ tab) accordingly .

3 Complete form IPORAC (IPO, Report and Application to Court). Send 3 authenticated copies of the application (IPORAC) for sealing to the court, together with court fee and one copy of the report for the court file and request that they return 2 copies of the sealed application and retain a copy for filing on the court file. Enter details within section 6 of the ‘Datastore’ tab and ‘Hearings’ tab notes in ISCIS. Ensure forms are returned from Court with sufficient time to give bankrupt at least 28 days notice of hearing date.

4 Complete form IPONA (IPO, Notice of Application) and serve on the bankrupt together with a copy of the form IPORAC. A certificate of service [Form N215] (A pre-filled version of the form is available to use from the ‘Forms to use’ section as form IPOCERT) should be completed by the person who effects service, and then filed in court (this is required to be done within 21 days of service having been effected). Send a copy of the form IPONA to the court for filing on the court file. File copies of the IPORAC and IPONA on the office electronic file.

5 Any telephone call or written communication from the bankrupt about the IPO application should be referred to the examiner

Before the hearing date

6 Pass 3 copies of form IPO(4 copies of form IPO will be needed if the bankrupt’s employer will be making the payments direct) to the official receiver/assistant official receiver who is attending the hearing(‘Docs’ tab) and request that 2(or 3) copies are returned and one retained for filing on the court file.

Once order made

7 Receive the sealed IPO from the officer who attended Court and prepare form IPOSV (Income Payments Order, Service on Bankrupt)(‘Docs’ tab). Send one copy of form IPO under cover of the IPOSV to the bankrupt or employer, where appropriate. Store copy IPO and IPOSV on the electronic office file.

8 Note outcome of order on ISCIS (‘Hearings’ tab).

9 If there are any other assets in the case that would justify an insolvency practitioner appointment make the necessary arrangements. Ensure that the bankrupt is contacted to arrange for the payments under the IPO to start prior to the insolvency practitioner’s appointment, if there could be a time delay before he/she takes office.

For more information see Case Help Manual parts: Appointment by the Secretary of State and Handover to Insolvency Practitioner.

10 (Amended July 2014)  

Once the IPO is obtained and if no appointment of an insolvency practitioner is to be made, the case must be transferred to the appropriate LTADT to monitor collection Clarke Willmott, the collection agents, should be instructed by the originating official receiver’s office via the Clarke Willmott Debt View website. See Introduction 13 and 14 above. Within two working days Clarke Willmott will set up on their Debt View website a separate record for each IPO and the case clerk will need to log on to their system to view.

Information on the service provided by Clarke Willmott and full guidance on using their Debt View website is available on the Clarke Willmott intranet page

11 (Amended July 2014)

If the IPO is an NT tax coding IPO or contains an NT tax coding element issue form IRNTMB to HMRC, PO Box 1000, Newcastle upon Tyne, NE98 1WY. A copy of form TNIDIS should be sent separately by e-mail to TNIDIS.ptopsbankruptcy@hmrc.gsi.gov.uk. Clarke Willmott must also be informed via the Clarke Willmott Debt View website so that once the NT tax coding has been applied they can start collecting the payments without delay.

12 (Amended July 2014) 

If the bankrupt has already made payments direct to the official receiver before the case has been passed to Clarke Willmott, the ‘payments‘ screen on Debt View  should be noted accordingly so that any such payments can be taken into account.

13 (Amended July 2014)

If notification is received from the LTADT that they are making an application to vary the IPO, they will liaise with the official receiver for a court date. The local official receiver may be asked to attend at court for this variation hearing but the LTADT will prepare and serve all necessary paperwork.

14 (Amended July 2014)

If appropriate, inform the official receiver/ assistant official receiver of the date of the hearing so that arrangements can be made for attendance at court. Advise the LTADT of the outcome of the hearing.