# Ivan Yates says "all his income will be gone for 3 years" after UK bankruptcy



## fisher

steve thatcher and others have covered the consequences of going bankrupt in the UK on previous threads but never mentioned that after the 12 month bankruptcy that all earnings for the next 2 years goes to the court beyond normal living expenses

i'm not allowed post the link as i don't have enough posts but if you google independent.ie ivan yates bankrupt it details his bankruptcy case 

is this always the case as i had never heard that before?


----------



## vandriver

Mr Yates said: "I will be an economic zombie for a year. All my assets are forfeit and put in the hands of the court receiver. For a further two years after the initial year, the court takes all money I earn beyond reasonable living expenses.


----------



## Brendan Burgess

This is not correct. 

The bankruptcy period lasts one year in the UK.

The court may make a payment order for a further two years where a certain amount must be paid. This is reasonable. People on salaries of £100,000 can go bankrupt. Their surplus income can be used for 2 years. 

Bankruptcy advisors recommend to people not to have big incomes during the year of bankruptcy. The court will not bother making such an order and so the bankrupt is completely free of debt and obligations after 1 year.

Under the proposed Irish legislation, the bankruptcy period is 3 years and a payment order can be made for a further 5 years. So it's a possible 8 years compared to a possible 3 years in the UK.


----------



## Bronte

Ivan is different because he has a Dail pension of about 75K. 

He sounded a bit bitter, it's a pity he had to go abroad to sort out his financials affairs but anyone would do what he did with our draconian bankruptcy laws.  

AIB are probably going to get a lot less than they could have and that just shows more of their incompetence and arrogance.  But us taxpayers will continue to pay for them.


----------



## Steve Thatcher

I have always pointed out in my posts and articles and radio, that an income payments agreement or order can be put in place any time within the first 12 months ie when you are bankrupt. It lasts for a maximum of 36 months from the time of the agreement. 
I always advise that income during the 12 months of the bankruptcy is always kept to just what you need to live on and no more. If you earn more than you reasonably need it can be taken for your creditors.
Once you are discharged, ie after 12 months you can earn what you like and it can never be taken.
Even before Ivan went bankrupt I was commenting that he would have an IPA because of his pension. It is no surprise to me and it wouldn't be to him. The consultation for him is it is only three years and he is now debt free

Steve
Www.helpwithdebtuk.com


----------



## Bronte

Does Ivan then have to spend 3 years in the UK?  And does he not get fully discharged until then?


----------



## Steve Thatcher

Bronte said:


> Does Ivan then have to spend 3 years in the UK?  And does he not get fully discharged until then?



Hi Bronte, Ivan can elect to move his COMI any time he wants for any reason. If he wanted to come back to Iland very soon he could do. He just needs to co-operate with the Official Receiver.  If he had a change of circumstances, say he got employment again, he would need to inform the OR and this might affect his Income payments agreement. generally however once these a set up they are administered by a firm of solicitors called Moon Beaver who simply collect the instalments every month. They would not really look to get involved unless payments actually stopped.

Steve
Www.debtoptions.ie


----------



## Wishes

I was told to purposely not find employment when I get to the UK and secondly not to seek employment for the forseeable future ie 3 years.


----------



## GDUFFY

Steve Thatcher said:


> I have always pointed out in my posts and articles and radio, that an income payments agreement or order can be put in place any time within the first 12 months ie when you are bankrupt. It lasts for a maximum of 36 months from the time of the agreement.
> I always advise that income during the 12 months of the bankruptcy is always kept to just what you need to live on and no more. If you earn more than you reasonably need it can be taken for your creditors.
> Once you are discharged, ie after 12 months you can earn what you like and it can never be taken.
> Even before Ivan went bankrupt I was commenting that he would have an IPA because of his pension. It is no surprise to me and it wouldn't be to him. The consultation for him is it is only three years and he is now debt free
> 
> Steve
> [broken link removed]





Am I right in thinking from what Steve said above ,
that if your income is low during the first 12 months "The Bankruptcy period "  and you subsequently get a high paying job after the initial 12 months bankruptcy are up, the OR or past creditors have no power or avenue to come back to the well ?
Does this apply to inheritance also received after the 12 months are up ?


----------



## Bronte

Wishes said:


> I was told to purposely not find employment when I get to the UK and secondly not to seek employment for the forseeable future ie 3 years.


 
Well if you were told it by one of the UK bankruptcy experts it must mean that your bankruptcy will go better if you have no income.  Maybe a low paid job that only pays enough to live on, but is better than UK dole would be ok.  

I wonder is there a UK website that shows what orders are made in the bankruptcy courts.  Which would give us a better idea of how it works.  It would be very interesting if an Irish person who went bankrupt in the UK explained the procedure on here.


----------



## Steve Thatcher

Bronte said:


> Well if you were told it by one of the UK bankruptcy experts it must mean that your bankruptcy will go better if you have no income.  Maybe a low paid job that only pays enough to live on, but is better than UK dole would be ok.
> 
> I wonder is there a UK website that shows what orders are made in the bankruptcy courts.  Which would give us a better idea of how it works.  It would be very interesting if an Irish person who went bankrupt in the UK explained the procedure on here.


 
I can't see why a bankruptcy expert would say don't get a job. It makes no sense. The OR is only entitled to excess income over and above the bankrupts reasonable needs. He can only put an income payments agreement in place in the first 12 months. If he cannot do that because there is no excess income he loses his right to do so.
Why also then not get a job for two or three years.
It was very poor advice.
Bronte you will not get people on here talking about the UK because it is private.


----------



## Savvy

Steve,
For a family of 2+2 can you give a ball park figure for the income level after which the OR is likely to place a payments agreement?


----------



## Bronte

Steve Thatcher said:


> Bronte you will not get people on here talking about the UK because it is private.


 
People discuss all kinds of private things on here as they are looking for financial advice.  It would be very interesting to hear from one of your Irish clients, to ask them how they want about bankruptcy and how they feel about it.  

I have a question for you.  Taking the Ivan Yates case, where he has a guaranteed income of 75K for life, yet he will not have to pay any of that after the 3 years.  Is this because the rules in the UK say that because he is insolvent, which he quite clearly is, that due to this insolvency he is allowed to get on with his life, despite the income.  The logic being that it's better that people become productive members of society.    

But take another case, one where the only debt is a mortgage, which is in default but the debtor can afford to pay it, but decides not to.  To avoid paying it he takes leave of absence and goes to the UK to go bankrupty.   In that case the person is not insolvent, but to avoid paying the bank have taken leave of absence from their civil servant job.   Is that allowed, or would the UK receiver not allow the bankruptcy if they knew about the permanent job.


----------



## Steve Thatcher

Savvy said:


> Steve,
> For a family of 2+2 can you give a ball park figure for the income level after which the OR is likely to place a payments agreement?



In the UK if you ran a car and rented a property at about £800 per month, you should be able to earn £2500 net per month without attracting an income payments order. 
It is different in every case, and the official receiver looks at each case based upon the individuals reasonable needs

Steve Thatcher

Www.debtoptions.ie


----------



## Steve Thatcher

Bronte said:


> People discuss all kinds of private things on here as they are looking for financial advice.  It would be very interesting to hear from one of your Irish clients, to ask them how they want about bankruptcy and how they feel about it.
> 
> 
> We had a couple at our last seminar who did just that. They also appear in the papers from time to time.
> 
> 
> I have a question for you.  Taking the Ivan Yates case, where he has a guaranteed income of 75K for life, yet he will not have to pay any of that after the 3 years.  Is this because the rules in the UK say that because he is insolvent, which he quite clearly is, that due to this insolvency he is allowed to get on with his life, despite the income.  The logic being that it's better that people become productive members of society.
> 
> 
> Yes precisely that. It resulted from the Enterprise Act which was enacted by Peter Mandellson of the last labour govt as a result of seeing the USA model of bankruptcy and the need for people to be able to move on and contribute economically again.
> 
> 
> But take another case, one where the only debt is a mortgage, which is in default but the debtor can afford to pay it, but decides not to.  To avoid paying it he takes leave of absence and goes to the UK to go bankrupty.   In that case the person is not insolvent, but to avoid paying the bank have taken leave of absence from their civil servant job.   Is that allowed, or would the UK receiver not allow the bankruptcy if they knew about the permanent job.



If you turn up in the UK unemployed, ( I always advise a job of some description to help establish the COMI). The OR will not look behind that. You are insolvent at the time, ie you cannot pay your debts as and when they fall due and your assets are worth less than your liabilities

Steve Thatcher

Www.debtoptions.ie


----------

