Income payments agreements (IPAs) under section 310A of the Insolvency Act 1986
Produced in partnership with William Willson of South Square and Robert Smailes of Leonard Curtis Business Solutions Group

The following Restructuring & Insolvency practice note produced in partnership with William Willson of South Square and Robert Smailes of Leonard Curtis Business Solutions Group provides comprehensive and up to date legal information covering:

  • Income payments agreements (IPAs) under section 310A of the Insolvency Act 1986
  • What is an IPO and when is it used?
  • Entering into an income payments agreement in the alternative
  • An example of a nil tax code IPA
  • Examples of IPA calculations

Income payments agreements (IPAs) under section 310A of the Insolvency Act 1986

An income payments agreement (IPA) is an alternative to an income payments order (IPO), used in circumstances where the bankrupt voluntarily agrees to their surplus income being paid into their bankruptcy estate. To understand IPAs in fuller detail, it is necessary to recall what an IPO is.

What is an IPO and when is it used?

After the making of a bankruptcy order against an individual, the bankrupt is no longer required to make any further payments directly to their creditors.

Often, this allows the bankrupt to have income over and above that needed to pay everyday living expenses.

So long as the bankrupt has not been discharged, the court may make an IPO under section 310 of the Insolvency Act 1986 (IA 1986) claiming for the bankrupt’s estate so much of the income of the bankrupt during which the order is in force as may be specified in the order. Notwithstanding that an IPO cannot be made after discharge, it can still have effect after the bankrupt has been discharged.

An IPO shall not allow the bankrupt to fall below the amount needed to meet reasonable domestic needs of the bankrupt and their family.

Entering into an income payments agreement in the alternative

However, as an alternative to an IPO, and as mentioned above, the IA 1986 allows for

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