An Income Payments Agreement (IPA) occurs when it is determined that you have surplus income after all of your expenses. The Official Receiver will place you in a 36 month IPA and this money will be used to cover the Insolvency Service’s costs in administering the bankruptcy and to distribute among your creditors. As the name implies, it is an agreement and you have the right to negotiate, but if both parties cannot agree on a figure it will be taken before a Judge, who will arbitrate. If this were to happen, it would no longer be an IPA but an IPO (Income Payments Order). This is a very good reason to seek professional assistance when completing your Income and Expenditure, as IPAs are often avoidable.