Part 8 Enforcing an IPA or IPO following default - initial action by collection agent
31.7.179 Objectives when seeking payments under an IPA/IPO
When considering the action to be taken with regard to an IPA/IPO, the trustee’s aim is to achieve the maximum payment of the amount due under the IPA/IPO, at the least expense to the estate. Ideally to do this the trustee will need to know the whereabouts of the bankrupt (or former bankrupt), to be able to establish his/her financial circumstances, and where money is payable and the bankrupt (or former bankrupt) is deemed capable of paying it, enforce payment. These principles form the basis for the guidance in this chapter, where there has been a default in payment of an existing IPA/IPO.
31.7.180 Details of the agent employed by The Service to collect monies due under an IPA or IPO
(amended June 2014)
Monies due under an IPA or an IPO are collected by a collection agent employed by The Service. The current contract holder is Clarke Willmott. See Case Help Manual Part Income Payments Agreements paragraphs 12-14 for contact details and full instructions to be sent to 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.
31.7.181 Recovery action taken by collection agent following default in an IPA or IPO
(amended June 2014)
Where the official receiver’s collection agent is collecting monies under an IPA/IPO, following default in payment the agent will carry out the following:
- Within three (working) days of any default in the agreed payment, Clarke Willmott will send a standard reminder letter to the bankrupt (or former bankrupt).
- If the bankrupt is co-operating and contacts the agent to advise that he/she is experiencing temporary financial difficulties (which Clarke Willmott assesses will be resolved within two months), in both an IPA and an IPO the agent has discretion to agree the terms under which the bankrupt will make good any missed payments and ensure that the schedule of payments is brought up to date within the term of the IPA/IPO (maximum 36 months), without reference to the originating LTADT.
- If a bankrupt contacts Clarke Willmott to inform them of a change in their financial circumstances, Clarke Willmott will issue an IPOQ. Once received, notification will be sent to the owning official receiver’s office/LTADT via the ‘task list’ in ‘my workbook‘ for the case officer assigned to the case. The completed form will be available to view online via the Case History. Reassessment is then performed by a member of staff in the receiver’s office/ LTADT. Confirmation of the result of this reassessment is then returned to Clarke Willmott via the ‘instruct us’ screen. In an IPO the matter will be referred to the LTADT so that the LTADT can prepare an application to court for the IPO to be varied, to seek a reduced amount. An IPO can only be varied by order of the court. The LTADT will liaise with the originating local official receiver regarding a court date and attending the hearing (see Case Help Manual Part Income Payments Orders paragraph 11).
- If the bankrupt fails to keep to the revised arrangement, Clarke Willmott will notify the official receiver within three days of the failure.
- Where a bankrupt fails to maintain payments under the IPA or any subsequently agreed variation, the agent has discretion to contact the bankrupt’s employer (using the details supplied with the initial instruction) to collect the IPA payments at source from the bankrupt’s salary. As the bankrupt has already provided his/her consent to this by signing the IPA form, no additional instruction is required from the official receiver or LTADT.
- Where payment is being sought from a third party other than the bankrupt’s employer, an application to court to vary the IPA will be required to collect payments at source from the third party. An application to court to vary the IPA will also be required where the employer refuses to make the direct payments from the bankrupt’s salary.
- In an IPO where the bankrupt has failed to co-operate following non-payment, the agent will refer the matter back to the LTADT to consider whether it is appropriate to make application to court for the IPO to be varied, to enable payment to be sought directly from the bankrupt’s employer or a third party [note 1][note 2]. The LTADT will liaise with the originating local official receiver regarding a court date and attending the hearing (see Case Help Manual Part Income Payments Orders paragraph 12).
- Where it is not possible for Clarke Willmott and the bankrupt or his/her employer to agree a collection at source or variation of the IPA/IPO, the matter will be referred back to the originating LTADT. This is likely to occur where the bankrupt fails to co-operate or a problem is more permanent, such as loss of employment, a permanent reduction in the bankrupt's income or permanent increase in expenditure.
31.7.182 Revised payments - period of payment
Whilst any revised terms for repayment of the arrears may continue beyond the date of discharge, they cannot extend beyond the period of three years from the date the IPA [note 3] originally came in to force or the IPO was made [note 4].
[Back to Part 7 Review, variation and discharge of an IPA or IPO] [On to Part 9 Enforcing an IPA or IPO following default – recovery action where bankrupt co-operates]