December 2010

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

Monies due under an IPA or an IPO are collected by a collection agent employed by The Service. The current contract holder is Moon Beever solicitors.  See Case Help Manual Part Income Payments Agreements paragraphs 8 -10 and  Case Help Manual Part Income Payments Orders paragraphs 9 -10  for contact details and full instructions to be sent to Moon Beever. See also the ORBS intranet page at: http://intranet/CAD/ORBS/Contract%20Information/Moon%20Beever%20Links.htm for details of the service level agreement and guidance on instructing and dealing with Moon Beever.

31.7.181 Recovery action taken by collection agent following default in an IPA or IPO

Where the official receiver’s collection agent is collecting monies under an IPA/IPO, following default in payment of an IPA/IPO the agent will carry out the following:

1. Within three (working) days of any default in the agreed payment,  Moon Beever will send a standard reminder letter to the bankrupt (or former bankrupt).
2. If the bankrupt is co-operating and contacts the agent to advise that he/she is experiencing temporary financial difficulties (which Moon Beever 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 RTLU.
3. If a bankrupt contacts Moon Beever to inform them of a change in their financial circumstances, Moon Beever will issue an IPOQ (for clarity called a COCQ on the Moon Beever system). Once received notification will be sent to the owning official receiver/ RTLU office via the workflow. The completed form will be available to view online via the Case History. Reassessment is then performed by a member of the official receiver / RTLU office. Confirmation of the result of this reassessment is then returned to Moon Beever via the Instruct fee earner option. In an IPO the matter will be referred to the RTLU so that the RTLU 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 RTLU 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).
4. If the bankrupt fails to keep to the revised arrangement, Moon Beever will notify the official receiver within three days of the failure.  
5. If a bankrupt fails to maintain payments under the IPA or any subsequently agreed variation, the agent has discretion to pursue payment through an attachment of earnings order using the employer’s details supplied with the initial instruction, no additional instruction is required from the official receiver/RTLU.   
6. In an IPO where the bankrupt has failed to co-operate following non-payment, the agent will refer the matter back to the RTLU 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 RTLU 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).
7. Where it is not possible for Moon Beever and the bankrupt to agree on a variation of the IPA/IPO the matter will be referred back to the originating RTLU. This is likely to occur where the bankrupt fails to co-perate 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].

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