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Bankruptcy Case Study In Respect Of "Your
Future Income"
Background
Jerome is a bachelor. He rents a flat.
He receives £1400 take home pay each month.
Following his bankruptcy Jerome no longer
has to pay any sum to eight credit card companies to which
he owed £40,000. His monthly costs of living (rent,
food, gas, electricity, travel, clothing etc) come to £1200.
Question
Is Jerome to
be requested by the Official Receiver to pay £200 per
month under an Income Payments Order.
Answer
The answer
is yes and no.
In the first year of the bankruptcy Jeromes's take home pay
is likely to increase for part of the period owing to the
fact that no tax will be payable. (Click here to read the
relevant paragraph of the layman's guide).
If, consequently, the take home pay for that first period
rises to say £1700 per month, then the Income Payments
Order for the first period would be approximately £500
per month.
For the remainder
of the three year bankruptcy period Jerome's take home pay
would return to being £1400 per month and his Income
Payments Order would be approximately £200 per month.
Comment
Never sign an Income Payments Order unless
you have first taken professional advice.
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