2.2 What happens to my income?
Your trustee may want you to make a contribution from your income or pension to help towards paying for the cost of your bankruptcy and your debts. They will not take a contribution from social security benefits or tax credits.
Your trustee will look at your income and how much you and your family need to live on. They will assess whether or not you have any surplus income and, if you do, they will expect you to make a contribution from that. They will agree a voluntary contribution amount with you. This is known as an Income
Payment Agreement (IPA). You can agree to have deductions taken directly from your wages.
If you cannot reach an agreement, your trustee can ask a sheriff to decide the amount you should pay. The sheriff will take into account any information you provide before making a decision. The sheriff will make an Income Payment Order (IPO) stating the amount you must pay. Your trustee can ask the sheriff to order payments directly from your wages.
2.2.1 Can my contribution change?
Every 6 months your trustee will send you a questionnaire to review your financial position. You must complete and return this. If your financial circumstances change you can ask your trustee to review your contributions. If you have an IPA, your trustee can reassess the situation and may vary your contribution. If you have an IPO, you or your trustee will have to go back to court to let the sheriff decide whether your contribution should be varied. Even if your circumstances do not change, you must return the questionnaire.
2.2.2 How long do I have to pay contributions?
An IPA and an IPO last for 3 years from the date they are set up.
It is a criminal offence to fail to comply with the terms of an IPO. If you stop making your contribution under your IPO, your trustee may report you to the sheriff.
If you stop making your contribution under your IPA, your trustee may apply to the sheriff for an IPO to be made. You must, therefore, contact your trustee as soon as possible if you are unable to continue paying your contribution.