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CABmoney Bankruptcy Payment Order Calculator

The bankruptcy calculator has been designed as a guide and information tool in relation to the income payments procedure.

Calculations and figures should only be used as a guide and not taken as definite.

You should not make any decisions on whether to petition for bankruptcy or not based on the results given by the IPA Calculator.

Before using the bankruptcy calculator it is advisable to read the rest of this guide (including the IPA/IPO section) and have details of your income and expenditure to hand.

Please note: The Official Receiver will not ask for an IPA or IPO if your only source of income is State Benefit payments.

Always get proper advice on bankruptcy and the other options available for dealing with debts before deciding on any solution.

Using the Bankruptcy Calculator

Enter your monthly income and expenditure figures and the calculator will work out your draft disposable income followed by any funds available for payments after standard official receiver allowances.

Click on the down the left hand side where necessary for further information and guide figures from the Insolvency Service technical manual.

Calculate monthly amounts:

£
(Weekly wage x 52) ÷ 12 = monthly amount
or
£
Yearly wage ÷ 12 = monthly amount
Monthly amount:

Household Details

Number of people in my household
Only include yourself, your partner, plus any dependants (children and adults).
Don't include any non-dependant adults or children.

All boxes should have a number in them, please check that none of them contain letters or other symbols before you continue.

1) Income

Monthly
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It is reasonable to expect that within the household of the bankrupt and his/her family, the income received by a working spouse/civil partner/partner (all referred to as 'partner' for the remainder of this section) or a partner who receives income from other independent means, will be used to contribute to the household expenditure in some way, for example by purchasing food, clothing for him/herself and any children, etc. The bankrupt may genuinely not know his/her partner's income and/or the partner may not be willing to disclose it to the official receiver as they are not personally subject to the proceedings. Legal advice has been received that it is not a proper use of section 366 [note 5] to have a partner privately examined for the purpose of obtaining details of his/her income to establish whether an IPA/IPO may be obtained.

Where resistance to the disclosure of the partner's income is encountered, in the absence of any information to the contrary, it is appropriate for the official receiver to assume that the working partner pays for 50% of all household expenditure. This will enable an income payments calculation to be completed to ascertain whether there is any surplus, and the bankrupt's share of that surplus, against which an IPA/IPO can be sought. It is likely that an assumption of this nature will provoke a response from the bankrupt and/or their partner and if the required information concerning the exact amount of the partner's income is then received, the official receiver may re-calculate the income and expenditure of the bankrupt taking in to account this new information.

In the same way as it is reasonable to expect that a working partner's income will be included in covering household expenditure (see Section (i) of this part), it is also reasonable to expect other adults living in the household who have an income, such as adult children or members of the extended family who live all or some of the time with the bankrupt (this could include students), to make some contribution towards the outgoings of the household. Any contribution received from them should be included in income assessed against household expenditure within the IPA/IPO calculation, but it must be noted that an IPA/IPO claim can only be made against the surplus arising from the bankrupt's income.
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0.00

All boxes should have a number in them, please check that none of them contain letters or other symbols before you continue.

2) Outgoings

Monthly
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£
Where there are additional secondary secured creditors the official receiver should take into account all payments to be made. Where there is no equity available to secondary charge holders, the official receiver should not include any payment to these creditors in an income payments calculation as there is no enforcement action that can be taken in respect of these debts as the asset is already fully charged, and as, in effect, the secondary charge holder is an unsecured creditor, any payment to it could be considered to contravene the provisions of section 285(3) of the Insolvency Act 1986.
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In the case of Christina Sharples v Places For People Homes Limited [2011] EWCA Civ 813 the Court of Appeal held that the right of a landlord to recover his/her property from a defaulting tenant is not affected by bankruptcy.

The case concerned the situation where a possession order had been obtained against a tenant, holding an assured tenancy in respect of rent arrears. The tenant had been declared bankrupt five days before the possession hearing. The Court of Appeal upheld an earlier decision [note 1] that the possession order was not a remedy against the property or person of the bankrupt and therefore was not restricted [note 2]. The Court of Appeal made it clear that the landlord might seek possession of the property both before or after the date of the bankruptcy order, permission of the (bankruptcy) court was not required to continue the possession proceedings [note 3].

The landlord is not entitled to recover any arrears of rent, except by way of dividend in the bankruptcy. A possession order granted might still be suspended but not on condition of the payment of rent arrears. Any suspended possession order in force at the date of the bankruptcy order might be varied to remove any provision for payment of rent arrears.

The consequence of this is, in assessing a bankrupt for an income payments agreement, or order, official receivers should not include any amounts payable in respect of rent arrears under a suspended possession order. Commencement of the agreement should be deferred or stepped allowing the bankrupt time to seek a variation of the suspended possession order. Under no circumstances should the bankrupt be advised to cease making payments under the terms of the suspended possession order before it has been varied by the court.

No allowance should be made in respect of an informal agreement to make payments of rent arrears to avoid possession proceedings. Such payments should stop immediately, even if this might trigger an application for possession.
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Variable - Average for England £90-£130 per month
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Single Person (£206 approx)
Couple (£403 approx)
Extra per dependant adult inc children over 16 (£197 approx)
Each Child under 16 - single person (£89 approx)
Each Child under 16 - couple (£60 approx)
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£
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£
Single Person (£33 approx)
Couple (£42 approx)
Extra per dependant adult inc children over 16 (£9 approx)
Each Child under 16 (£2 approx)
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£145.50 per year or £12 per month

A television licence is considered part of normal family expenditure that should be taken into account when assessing a bankrupt's income and expenditure, in line with the averages provided by the household expenditure survey (also see Annex D). Where the provision of digital, satellite or cable TV services is recorded as essential expenditure by the bankrupt, the official receiver will need to assess whether the amount of expenditure claimed is required to meet the reasonable domestic needs of the bankrupt and his/her family in accessing television and communication channels. See also paragraph 31.7.93 regarding combined cable or satellite telephone, broadband internet and TV packages and paragraph 31.7.111 regarding the provision of TV services.
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Formal arrangements only - calculated from net income x 15% for one child, 20% for two children, 25% for three plus children
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Single Person (£41 approx)
Couple (£108 approx)
Extra per dependant adult inc children over 16 (£41 approx)
Each Child under 16 (£28.50 approx)
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Single Person (£34 approx)
Couple (£56 approx)
Extra per dependant adult inc children over 16 (£18 approx)
Each Child under 16 - single person (£9.50 approx)
Each Child under 16 - couple (£6 approx)
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Variable - Allowable if seem reasonable when considered with landline costs above

Costs must be reasonable when compared with average expenditure for telephone costs as detailed in the HES. It may be necessary to disallow part of the monthly amount claimed if the claim is above average and use of the mobile telephone can be shown to be predominantly for social purposes only. Where the bankrupt uses the mobile phone for business calls, the official receiver should establish whether the bankrupt's employer provides re-imbursement for this usage (or if self-employed, whether the bankrupt claims expenses for this usage from the business in addition to any other drawings/income they have already declared). The re-imbursement can be included as additional income to off-set against the total expenditure claimed, or the work-related portion of the claim for mobile phone usage could simply be disallowed. The same principle could also be applied where a bankrupt uses their landline home telephone for business as well as personal calls.

Where the bankrupt claims that use of a mobile phone is essential, but costs claimed have been reduced or disallowed by the official receiver/trustee in the IPA/IPO calculation, it is up to the bankrupt to consider whether a cheaper alternative is available, such as a 'pay as you go' scheme. Where the bankrupt is still in receipt of ongoing services under a contract at the date of the bankruptcy order, the official receiver/trustee should take care not to adopt any ongoing service contract previously held by the bankrupt. Where a penalty is incurred arising from early termination of a telephone contract this should be included as a debt in the bankruptcy proceedings (see also paragraph 31.7.93)
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Single Person (£83 approx)
Couple (£196 approx)
Extra per dependant adult inc children over 16 (£83 approx)
Each Child under 16 (£5.50 approx)
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Single Person (£28 approx)
Couple (£67 approx)
Extra per dependant adult inc children over 16 (£28 approx)
Each Child under 16 (£2 approx)
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Variable - check for exemptions
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Variable - Allowable if to cover whilst parents are working. Consider number and amount of claims.

Claims for extra-curricular activities should be assessed in the context of the individual's circumstances and the needs of his/her dependant child/children. Any excessive claims for multiple extra-curricular activities should be closely examined and evidenced.
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Variable - In normal circumstances payments for a standard building and contents insurance policy should be allowed

Any claims for items such as household insurance should be assessed by the examiner to consider whether the continued payment of the expense is an essential outgoing and what will be the consequence if the payment is disallowed. In normal circumstances payments for a standard building and contents insurance policy should be allowed as part of the normal monthly outgoings required to meet the bankrupt's reasonable domestic needs, unless the amounts appear excessive in which case further enquiries should be made and/or the bankrupt prompted to make enquiries regarding a cheaper policy.
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Variable - Allowable if to cover while parents are working rather than matter of convenience

An expenditure claim for after school clubs should be considered where they are used to provide childcare where parents are working. If the use of the club is simply a matter of convenience for the bankrupt and/or his/her spouse/civil partner/partner the bankrupt should be informed that the cost of funding the club cannot be considered as an essential expense.
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Not allowable unless to cover reasonable domestic need

Single Person (£20 approx)
Couple (£40 approx)
Extra per dependant adult inc children over 16 (£20 approx)
Each Child under 16 (£10 approx)


General household expenditure such as hairdressing, family holidays and additional allowances for pet expenses: food, insurance etc. should be considered on an individual basis. No amounts should be included for these types of expenditure where it cannot be evidenced that the expenditure is fulfilling a reasonable domestic need given the particular circumstances of the bankrupt and his/her family. Where any household/family expenditure claimed appears above average or excessive, further explanation and evidence should be sought. Where no evidence is provided to the official receiver to justify the excess expenditure, he/she should either disallow the expenditure or, where appropriate, include a reduced amount for that item, referring to the average expenditure guidance for a similar sized family unit in the HES, also see Annex D.
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Allowable to meet reasonable domestic need

Single Person (£15 approx)
Couple (£30 approx)
Extra per dependant adult inc children over 16 (£15 approx)
Each Child under 16 (£5 approx)


General household expenditure such as hairdressing, family holidays and additional allowances for pet expenses: food, insurance etc. should be considered on an individual basis. No amounts should be included for these types of expenditure where it cannot be evidenced that the expenditure is fulfilling a reasonable domestic need given the particular circumstances of the bankrupt and his/her family. Where any household/family expenditure claimed appears above average or excessive, further explanation and evidence should be sought. Where no evidence is provided to the official receiver to justify the excess expenditure, he/she should either disallow the expenditure or, where appropriate, include a reduced amount for that item, referring to the average expenditure guidance for a similar sized family unit in the HES, also see Annex D.
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Should not be funded at the expense of creditors and should only be considered if meeting a genuine need or healthcare requirement

Single Person (£30 approx)
Couple (£50 approx)
Extra per dependant adult inc children over 16 (£15 approx)
Each Child under 16 (£15 approx)


No allowance should be included for social and entertainment expenses (e.g. cigarettes, alcohol, betting etc.) these should not be funded at the expense of creditors. Only in exceptional circumstances should the official receiver/trustee allow any flexibility concerning these expenses (see Annex D).

In normal circumstances membership of a sporting club, gym, golf club, stables etc. is not considered an essential day-to-day living requirement. Where sufficient evidence is provided to suggest that the expenditure is necessary, the official receiver should make a decision based on the circumstances relevant to the individual. An example of individual circumstances affecting this type of expenditure might be where the bankrupt has evidence from his/her GP prescribing exercise as an essential health treatment, which may in turn require the bankrupt to pay for membership of a local gym to fulfil this treatment (see Annex D).
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Court imposed fines only
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Claims for essential laundry & replacement to be included

Claims for the essential replacement and laundry of clothing (which may in some circumstances include dry-cleaning) should normally be included as a reasonable domestic need in any income payments calculation. What is considered reasonable will depend on the individual circumstances of the bankrupt and his/her family. Where a bankrupt records higher than average outgoings for clothing or laundry, when compared with the HES, he/she should be asked to provide further explanation/evidence as to why the higher amount is required. In deciding whether an amount above the average should be allowed to enable the bankrupt and his/her family to meet their reasonable domestic needs, the official receiver should consider whether the bankrupt's household includes, for example, young children or a family member with a diagnosed medical condition, who require frequent changes of clothing or bedding etc. Other factors to consider are the nature of the bankrupt's employment and clothing requirements arising e.g. whether he/she is required by his/her employer to fund specific clothing relevant to his/her employment (see also paragraph 31.7.107).
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Variable - Allowable to cover essential payments in supplement to NHS treatment

NHS healthcare is provided to meet the reasonable needs of the population in providing healthcare, so as an essential expense whilst for example, payment towards NHS dental care should be included, claims for expenditure for private treatment or health insurance would not normally be considered. Where the bankrupt can demonstrate to the satisfaction of the official receiver/trustee that he/she has no practical alternative but to pay for private healthcare (such as there being no NHS dental service available to them in the area where they live or work) an allowance for payment for an annual check-up and basic treatment at a privately run dental practice may be considered as meeting a reasonable domestic need, in the same way as an allowance for charges made by an NHS dentist for these treatments should be allowed.

It must be stressed that any payments claimed for private healthcare or medical insurance should only be allowed where it can be demonstrated that there is no practical alternative NHS facility available, or, for example, that to disallow the payment would have a significant detrimental effect on the health, wellbeing or future of a dependant child.
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Cost £7.65 per item. Pre pay certificate £29.10 for three months £104 per year

Where the bankrupt is liable to pay for prescriptions and is claiming for multiple item monthly prescription charges, the official receiver/trustee should assess whether the costs claimed are in excess of the average monthly prescription costs available under either a three month or twelve month pre-payment certificate. These prepayment certificates can provide a considerable reduction in the monthly cost of prescriptions where an individual has to pay for more than four prescription items in three months or fourteen items in twelve months.

For the most up-to-date information on prescription costs and pre-payment certificates see the NHSBSA website
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Variable - Allowable to cover eye tests and reasonable glasses costs

The costs of paying for eye tests, glasses etc. may be included as a reasonable outgoing. The official receiver should investigate above average claims, and, where a cheaper alternative is available (e.g. less expensive glasses frames) which would still meet the bankrupt's reasonable needs, only allow expenditure sufficient to provide the cheaper alternative.

It must be stressed that any payments claimed for private healthcare or medical insurance should only be allowed where it can be demonstrated that there is no practical alternative NHS facility available, or, for example, that to disallow the payment would have a significant detrimental effect on the health, wellbeing or future of a dependant child.
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Not allowable unless to cover reasonable domestic need proof of expenditure required

General household expenditure such as hairdressing, family holidays and additional allowances for pet expenses: food, insurance etc. should be considered on an individual basis. No amounts should be included for these types of expenditure where it cannot be evidenced that the expenditure is fulfilling a reasonable domestic need given the particular circumstances of the bankrupt and his/her family. Where any household/family expenditure claimed appears above average or excessive, further explanation and evidence should be sought. Where no evidence is provided to the official receiver to justify the excess expenditure, he/she should either disallow the expenditure or, where appropriate, include a reduced amount for that item, referring to the average expenditure guidance for a similar sized family unit in the HES, also see Annex D.
£
Not allowable unless to cover reasonable domestic need proof of expenditure required

General household expenditure such as hairdressing, family holidays and additional allowances for pet expenses: food, insurance etc. should be considered on an individual basis. No amounts should be included for these types of expenditure where it cannot be evidenced that the expenditure is fulfilling a reasonable domestic need given the particular circumstances of the bankrupt and his/her family. Where any household/family expenditure claimed appears above average or excessive, further explanation and evidence should be sought. Where no evidence is provided to the official receiver to justify the excess expenditure, he/she should either disallow the expenditure or, where appropriate, include a reduced amount for that item, referring to the average expenditure guidance for a similar sized family unit in the HES, also see Annex D.
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Variable, unless paid for by employer

Certain professions require affiliation to or membership of a particular society or professional body before a person is allowed to work in that profession. In considering this in relation to the outgoings to be included in an income and expenditure statement, the official receiver should take into account whether the bankrupt can continue to work without payment for membership of a professional body. With regard to clothing or specific equipment required as a necessity to carry out a trade or profession enquiries should be made as to whether the bankrupt receives an allowance for this or whether the clothing is provided and/or paid for by his/her employer, and the necessary adjustments made to reflect this in the bankrupt's income and expenditure statement.
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Variable - Consider individual needs when assessing to allow

As more and more services and information become accessible only via the internet, a consumer panel report published in June 2009 [note 6] suggests that “For those households who have it, broadband has become an essential utility as important as electricity, gas or voice telephony”. This view was further reinforced in March 2010 in the Prime Minister's statement “Building Britain's Digital Future”. Broadband internet provision is often required to complete banking, job application forms, children's homework etc. and also to access government or local council information and services, discounted goods and services, as well as general communication by e-mail etc. The official receiver should consider this when assessing the reasonable domestic needs of the bankrupt and his/her family and the inclusion of the costs of a broadband service in an income payments calculation.

With the advent of combined TV, telephone and internet packages available via broadband (where telephone services are provided free or at a reduced rate as a result of the provision of a broadband or TV service), the official receiver should consider whether the expenditure claimed for these combined services may in fact be equal to or less than the cost of a traditional land line only telephone service, which would be considered a reasonable domestic need.

Ongoing contracts for the supply of goods and services which remain in force at the date of bankruptcy vest in the trustee of the bankruptcy estate and the official receiver should take care not to adopt any ongoing service contracts. Where the bankrupt has signed up to an entertainment/communication agreement or package for a set period which cannot be terminated without a penalty being incurred, any penalty for early cancellation should be included as a debt in the bankruptcy proceedings.
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0

All boxes should have a number in them, please check that none of them contain letters or other symbols before you continue.

3) Disposable Income

Monthly
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0
0
An allowance for sundries and emergencies of £10 per month for the bankrupt and £10 per month for each dependant household member may be included as an expense in all income and expenditure assessments commenced after 1 December 2010 for a new IPA/IPO. So for example, an assessment for a bankrupt living with a partner and 2 children in the same household could include an amount of £40 per month for sundries and emergencies.
0

You may need to look at the income and expenditure figures you have entered again as your outgoings are more than your income (not suitable in bankruptcy)

4) Potential Funds For IPA/IPO

Monthly
0
0
The official receiver will only ask for an IPA or IPO if you can make a minimum payment of £20 per month. Where the payment would be below this amount the cost of collecting the payments would be more than the payments made.

0

Based on these figures, your disposable income is less than the O/R Standard Surplus Allowance (£20). If these figures are deemed acceptable by the O/R, then no income order will apply.

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All boxes should have a number in them, please check that none of them contain letters or other symbols before you continue.

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