How bankruptcy affects your income


You may have to make payments towards your bankruptcy debts from your income.

How much you will pay depends upon what you can afford after reasonable domestic needs have been taken into account. This amount will be based on allowable outgoings and expenses determined by the Insolvency Service.

Income Payments

Payments from your income can either be:

  • ordered by the Court using an Income Payment Order (IPO)
  • made voluntarily through an Income Payment Agreement (IPA)

There are no fixed guidelines on IPAs or IPOs.

Income Payment Order (IPO)

Your trustee may apply to Court for an IPO which requires you to make contributions towards your bankruptcy debts. An IPO will not be made if it would leave you without enough money to live on.

An IPO can:

  • be changed if income increases or decreases
  • last for up to 3 years and continue after your bankruptcy has ended

Income Payment Agreement (IPA)

An IPA is a written agreement between you and your trustee to pay a certain amount towards your bankruptcy debts. The agreement last for a certain period and cannot be longer than 3 years.

Developed with:
  • Department for the Economy