Published in Debt Advice Features on Friday, March 30 2007

If you are having difficulty with the repayments into your IPA or IPO you must contact your bankruptcy trustee as soon as you feel that you cannot make the payments, it is always better to notify them that you may not be able to make the payments than to just default or miss the payment without telling your trustee in bankruptcy.

If you miss a payment or payments under your IPA or IPO, your bankruptcy trustee will ask you for a reason or explanation as to why you missed the payments and when you knew you could not make the payment.

In addition to the explanation your bankruptcy trustee will try where possible to arrange for you to pay the arrears over a short space of time, maybe 2 -3 months, what this will mean is that you may be expected to pay the arrears on top of what you were expected or agreed to pay when you signed your IPA or IPO.

If the problem seems to be for the long term such as a drop in income or a justifiable increase in your living expenses, then your bankruptcy trustee will look at the situation again for you, assessing the income payments agreement, possibly making modifications to fit your current financial position.

If your bankruptcy trustee decides that an IPA or IPO is no longer appropriate (you lost your job or your income has decreased substantially) your trustee will cancel or suspend the agreement until your situation improves.

If your circumstances improve before the term of the IPA or IPO ends you must inform your bankruptcy trustee. After your IPA or IPO has been suspended and you can make payments or increase the payments then the agreement or order will continue from that point, but the IPA or IPO will end on the original date from when you signed the agreement.

If you miss 1 or more payments and do not contact your trustee to tell them about any difficulties you are having, then your bankruptcy trustee could apply for your discharge date to be suspended, in addition to taking steps to recover the money you owe, including getting another bankruptcy order made against you.

If you do not make a payment under an Income Payments Order you would be acting in contempt of court and the court may punish you, with any punishment that the court has the power to do!!!