If the Official Receiver or Trustee believes that the bankrupt has surplus income, namely more money than needed to pay reasonable living expenses, they may make an application to the Bankruptcy Court for the bankrupt to pay over the surplus income to creditors.
This is known as an “Income Payments Order” (IPO). The Trustee in Bankruptcy may seek agreement for the bankrupt to voluntarily pay an amount. This is known as an “Income Payments Agreement” (IPA). The Court will not make an IPO if the order will reduce the bankrupt’s income to a level below the amount required to pay for his and his family’s reasonable domestic needs. IPOs and IPAs are made for a maximum of 3 years.