Individual Ability to Pay Plus (INDIPAY+)
Guide
U.S. Environmental Protection Agency
Office of Enforcement and Compliance
Office of Site Remediation Enforcement and Office of Civil Enforcement
September 28, 2018

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Table of Contents
Key Terms in this Manual	iiii
I.	Introduction	1
II.	Objectives of INDIPAY+	2
III.	Components of INDIPAY+	2
IV.	Data Needed for INDPAY+ Analysis	3
V.	How does INDIPAY+ATP Analysis Work?	3
Step 1 - Gathering financial information and other relevant financial information	4
Step 2 - Conduct independent research	4
Step 3: Conduct additional internal and external research	4
Step 4: Review and verify data and relevant information	5
Step 5: Input data and relevant information into the Financial Analysis Spreadsheet and evaluate the
results	6
Step 6: Follow up	9
Step 7: Determine the best course of actionbased on spreadsheet test results:	10
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Key Terms
Ability to Pay (ATP) is a general policy framework that deals with financial issues for
settlements where a party's financial ability to pay is a significant consideration. The ATP
analysis uses financial information to evaluate the financial condition of the party (entity)
individual analyzed and its ability to pay for a cleanup, fines, and penalties.
INDIPAY+ are tools that offer added and expanded analysis to evaluate an individual's financial
ability to pay his or her environmental obligations. It goes beyond the INDIPAY screening model
and is the second step in the ATP analysis. Like INDIPAY, INDIPAY+ should, generally, only be
used for settlement purposes.
Cash Flow Test compares income to expenses.
Debt Capacity is an assessment of the amount of debt an individual can take on and repay on
time from available resources without jeopardizing their financial viability.
Individual means any party or entity liable for environmental obligations who uses the
Individual Income Tax form to submit financial data to the federal government. This Guide does
not apply to business entities such as C- or S-corporations that file corporate tax returns. In this
Guide, "individual" refers to a respondent, responsible party (RP), or potentially responsible
party (PRP).
Financial Hardship refers to a situation in which an individual is having financial difficulties
satisfying debt payments and/or meeting living expenses because of unexpected events or
changes that affects their cash flow. For example, changes in income, expenses, employment
status, or an emergency event signify potential strains on an individual's financial resources. An
undue financial hardship occurs if "satisfaction of the environmental claim will deprive a PRP of
ordinary and necessary assets or cause a PRP to be unable to pay for ordinary and necessary
business expenses and/or ordinary and necessary living expenses." (Source: EPA. "General
Policy on Superfund Ability to Pay Determination," 1997.)
INDIPAY is a computer-based model screening tool used to make a preliminary determination
of an individual's financial health, which is the first step in an ATP analysis.
Net Worth equals Total Assets minus Total Liabilities.

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I. Introduction
(a)	The Environmental Protection Agency (EPA) takes an individual's claim of financial
hardship seriously and does not seek to impose cleanup costs or a penalty that is
beyond an individual's financial means. Instead, it is EPA's policy to work with such
individuals in an effort to determine the appropriate level of contribution toward
cleanup costs or a suitable penalty adjustment in light of their financial circumstances.1
Therefore, it is essential for EPA to obtain the necessary financial information to inform
the evaluations and assessments.
(b)	EPA developed the INDIPAY model to aid with evaluating an individual's ability -to-pay
(ATP) claim (as opposed to a corporate claim evaluated using the ABEL model).2 The
purpose of an ATP analysis is to decide if there are financial resources (e.g., liquid assets,
credit lines) available to an individual to pay for environmental obligations. The ATP
analysis helps figure out whether an individual is in the financial position to pay the
entire amount owed or only a part, if any.
(c)	You are not required to use the INDIPAY model to conduct a financial analysis of an
individual. The INDIPAY computer model is a screening tool designed to give a quick and
accurate determination based on data found on an individual's tax returns and the
Financial Data Request Form (FDRF). The model is a conservative tool. If the INDIPAY
model concludes that an individual has the resources to pay a penalty or cleanup cost,
you may be confident in that result. However, in cases where the model gives a negative
or ambiguous result, you may decide to go beyond screening and further evaluate the
individual.
(d)	INDIPAY may serve as a useful screening tool in an ATP analysis. To help with those
circumstances not easily screened out after using INDIPAY, INDIPAY+ goes beyond by
offering added advice and tips on how to conduct an expanded analysis of an
individual's ATP. INDIPAY+ incorporates financial information disclosed by an individual
and other financial information available from other sources that may help in
completing the financial picture of an individual. It also discusses how to obtain and
confirm the information used in the analysis. Further, it explains what information to
use, what financial data to use in the analysis, and gives options to identify and consider
all potential resources available.
(e)	This Guide identifies steps you may take to get a better understanding of an individual's
financial situation. It provides you with a framework augmented by step-by-step
guidance on how to evaluate an individual's ATP claim and offers suggestions for further
evaluation where an individual's ability to pay is ambiguous. This Guide is intended to
1	See EPA's ability to pay guidance documents: Guidance on Determining a Violator's Ability to Pay a Civil Penalty
(Dec. 16,1986); General Policy on Superfund Ability to Pay Determinations (Sept. 30,1997); and Guidance on
Evaluating a Violator's Ability to Pay a Civil Penalty in an Administrative Enforcement Action (June 29, 2015).
2	See the Agency's Penalty and Financial Models Web page at https://wyyyy.epa.goy/enforcement/penaltv-and-
financial-models

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help you obtain, then evaluate, accurate and current financial information for an
individual and whether an individual has an ability to fulfill their environmental
obligations.3
II. Objectives of INDIPAY+
(a)	INDIPAY+ is a user-friendly, interactive tool for both non-financial personnel and
experienced financial analysts when conducting financial analysis on an individual's ATP
claim. OECA developed INDIPAY+ to aid case teams in collecting pertinent financial
information and conducting helpful calculations. Please note that per EPA guidance,
"[t]he case team should be mindful of the sensitivity of [an individual's] financial
information as well as handling confidential business information (CBI)."4
(b)	This Guide is designed to evaluate the ATP of an individual, an officer of a company
(personally liable), business (sole proprietorship), or an entity that files a U.S. Individual
Income Tax Return (Forms: 1040, 1040A and 1040EZ). Note: EPA also has models
available for corporations and municipalities.5
III. Components of INDIPAY+
Four companion documents comprise INDIPAY+. Together, they offer interactive instructions,
lists, and steps to conduct a financial analysis of an individual's ATP claim.
1. Financial Analysis Spreadsheets - Excel spreadsheets with built-in mathematical and
financial calculations, uses financial information from the individual as well as other
sources to help figure out whether the individual can pay for any environmental
obligations. The Financial Analysis Spreadsheets consist of the following:
a.	Net Worth Test - Provides a snapshot of an individual's financial health at a specific
time. Net worth presents a summary of what an individual owns (assets) less what
an individual owes to others (liabilities).
b.	Cash Flow Test - Provides information about the cash received (inflows) and cash
spent (outflows) by an individual. It helps determine if an individual can meet their
obligations using cash on hand.
c.	Future Cash Flow Test - Conducts the future cash flow calculations of expected in
the near future (5 years). It calculates expected income (inflows) and expenses
(outflows) that an individual might experience in the future that were not accounted
for in the current evaluation because they have not yet happened.
3	Owners and/or operators of underground storage tank systems are financially responsible for cleaning up
contamination should their system have a release.
4	Page 12 of EPA's Guidance on Evaluating a Violator's Ability to Pay a Civil Penalty in an Administrative
Enforcement Action (June 29, 2015) available at https://www.epa.gov/enforcement/guidance-evaluating-ability-
pav-civil-penajty-administrative-enforcement-actions.
5	See Penalty and Financial Models Web page at https://www.epa.gov/enforcement/penajty-and-financjal-model_s.
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d.	Debt Capacity Test - Determines the added debt that an individual can assume
without compromising financial stability. It estimates how much monthly income the
individual could spend repaying a debt without financial hardship.
e.	Penalty or Contribution Payment - Calculates the penalty or contribution payment
amounts that an individual can pay based on their generated cash flow over some
period of time (generally 5 years) and/or their ability to take on an added debt.
2.	Guide - walks the user through the steps, explaining how to use the documents to
complete the financial analysis of an individual.
3.	Checklist of Information Sources ("Checklist") - lists the sources of financial information
available to a user, describes the information needed to conduct the ATP analysis, and
gives tips on how to interpret certain facts/data and what to request as follow up.
4.	Reference Manual - offers a more in-depth description of the process to assess an
individual's ATP claim, gives additional information on what financial information a user
may need, where to find the information, and how to evaluate the financial
data/information. It also provides more detail about the financial analysis as well as
financial/accounting definitions and terminology.
IV. Data Needed for INDPAY+ Analysis
Basic Steps of INDIPAY+ ATP Analysis:
Step 1: Gather financial data and other relevant information directly from an
individual.
Step 2: Research independent sources of financial and related information to
obtain a more complete financial picture of an individual.
Step 3: Consider and apply optional steps, if helpful, in the INDIPAY analysis (e.g.,
checking with other state or EPA regional programs for information on an
individual).
Step 4: Review and verify accuracy of information to ensure that financial
information provided by an individual is correct and authentic.
Step 5: Input the data and information from Steps 1-3 into the Financial Analysis
Spreadsheets and conduct the financial analysis.
Step 6: Follow up (i.e., request more information and/or clarify data, as needed).
Step 7: Identify course of action(s), such as making an individual ATP
determination.
V. How does INDIPAY+ ATP Analysis Work?
The INDIPAY+ ATP analysis Guide is a series of seven steps recommended to conduct an
individual ATP analysis.
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Step 1- Gathering financial information and other relevant financial information.
Request information directly from an individual such as tax returns, bank statements, FDRF,
payroll statements, and W-2 Forms (see Checklist). The information you request will depend on
what you are trying to accomplish. For example, verification of certain items versus a more
thorough forensic financial investigation.
These sources furnish the core data you may need for an individual ATP analysis. The Checklist
instructs you on what specific information you may need to conduct the ATP analysis along with
the pertinent time period(s). These sources are not only fundamental to conducting an
individual ATP analysis, they are crucial for other reasons. For example, they can corroborate
data previously received. They also allow you to compare values from various sources (e.g.,
income information, tax return vs. FDRF) and fill in missing information on one document by
getting it from another (e.g., salary information from the W-2 when the individual does not
provide the tax return). To go ahead with this step, use the Checklist for sources under Primary
and Secondary Sources.
Step 2 - Conduct independent research.
Conduct independent research to identify an individual's assets and any business affiliations.
There are many third-party sources available to verify or augment the documentation received
from an individual. These include, and are not limited to, LexisNexis, CLEAR, and Dun &
Bradstreet. Other helpful resources include an individual's social media activity such Instagram,
Linkedln, and Facebook. Information collected from these sources may help confirm the data
from an individual and/or offer new and relevant financial information to the analysis. Because
this part of the process can bring in new information, plan to conduct step 2 in conjunction with
Step 1. You should confirm any information from independent research with an individual along
with a request for any necessary supporting documentation or explanations.
The Checklist guides you through the information that may be available to support the analysis
and describes the current known resources to obtain the information. It also includes
instructions and offers tips on how to conduct a search. The types of sources you use depend
on what is available to you. (See Checklist, Third Sources).
Step 3: Conduct supplementary internal and external research.
(a)	Check your own office to learn if there is an existing file on an individual (agency or
office archives).
(b)	Check with EPA Regional and state colleagues where an individual was/is operating to
see if they have any information that may be relevant to your investigation and analysis.
(See Checklist and ask the Regions/States if they already received or collected any
information listed in the Checklist).
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Step 4: Review and verify data and relevant information.
(a)	Compare the information and documents against the Checklist to see if any important
items are missing.
(b)	Next, confirm relevancy, accuracy, and credibility of information.
•	Relevancy - determine if the information is relevant and sufficient to conduct the
analysis. Not every analysis will need every piece of information in the Checklist or
Financial Analysis Spreadsheets. The information necessary for the analysis will
depend on the specific circumstances of each case. If needed information is missing,
request information from the individual or conduct more research.
•	Accuracy - decide if the information is correct and reflects an individual's financial
situation (See Checklist).
•	Credibility - determine if the information is dependable, trustworthy, reputable, and
authentic. For example, credible information would be information/documents that
are certified and/or signed, and/or issued by a third independent party (e.g., a bank
or CPA) while less credible documents are self-reported (e.g., a mortgage statement
issued by a mortgage company is more credible than a handwritten mortgage
statement created by an individual). The Reference Manual explains several
methods and lists resources for evaluating and cross-checking information.
(c)	Review sources of income to figure out how an individual generates money. An
individual may have one or more sources of income (e.g., employment salary,
investment, welfare, inheritance, and other sources).
(d)	Conduct a quick review of an individual's expenses to establish the necessary and
ordinary expenses of an individual. According to the Internal Revenue Service (IRS),
necessary and ordinary expenses are those expenses necessary to support a taxpayer's
health and welfare and/or production of income, including that of the family.6 Examples
of unnecessary expenses include: (1) individual buys a high-end luxury vehicle to drive to
customers' offices, and, (2) individual pays rental fees for a monthly air-conditioned
storage unit that not used in years. Review of an individual's sources of income can
suggest what expenses are reasonable and what expenses are unnecessary. For
example, a self-employed individual may have a higher insurance expense, more tax
deductions, and more frequent travel and entertainment expenses. A retired individual
might have higher medical and insurance expenses and lower educational expenses and,
typically, no childcare expenses.
6 According to the IRS, necessary expenses are food, housekeeping supplies, apparel and services, personal care
products and services, miscellaneous, housing, utilities, and transportation, https://www.irs.gov/businesses/small-
businesses-self-employed/national-standards-food-clothing-and-other-items
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Step 5: Input data and relevant information into the Financial Analysis Spreadsheets and
evaluate the results.
The Financial Analysis Spreadsheets have built-in formulas to supply results for each test. The
Financial Analysis Spreadsheets offer flexibility by allowing you to base the analysis on the
available information.
(a)	Start with inserting data into the Financial Analysis Spreadsheets:
•	Input the data and information collected from the individual, other
agencies/institutions, and other sources (IRS Forms 1040 and 4506 and information
that you collected from your independent research), into the Net Worth, Cash Flow,
Future Cash Flow, and Debt Capacity Spreadsheets found in the blue colored tabs.
•	Follow the structure and instructions built into the Financial Analysis Spreadsheets.
The instructions are in the gray colored tabs. The working columns (places where
you insert the data/information) are the white columns. The symbol "•/" in the gray
columns shows fields where specific data or information could be available under
the specific source.
(b)	Analyze the results from the Financial Analysis Spreadsheets.
•	While inserting data into the Financial Analysis Spreadsheets, consider the
following:
o Identify whether expenses are reasonable and necessary by considering the
individual's employment status, their family size, amount/value of expenses,
type of expense, timing of expense, etc. Reasonable and necessary expenses are
essential, appropriate, habitual, normal, usual, and common expenses incurred
by the individual.7 You may consider an expense reasonable if the nature of the
good or service acquired, and the amount involved, reflect the action that a
prudent person would have taken under the same circumstances at the time the
individual decided to incur the cost,
o Depending on an individual's circumstances, these examples may represent
unnecessary expenses. Clarify with the individual if you have questions about
these types of expenses:
>	An individual gave a large charitable contribution of $10,000, deducted from
income, to a nonprofit organization owned by his spouse. This is a
contribution expense because the organization is not a qualified organization
by IRS and EPA may not consider this as a reasonable expense and/or
necessary and ordinary expense. Add this contribution ($10,000) back in the
Financial Analysis Spreadsheets as additional income.
>	An individual spends money on gambling, vacations, a membership to an
expensive golf club, rents a beach condominium, or regularly takes a taxi to
work instead of available public transportation, etc. If these expenses are not
7 OSRE decided on what type of expenses are reasonable based on the IRS's publication titled [insert title here] at
https://www.irs.gov/publicatipns/p535/ch02.html.
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reasonable, ordinary, and necessary expenses, you should add them back in
the Financial Analysis Spreadsheets.
>	An owner of an online consulting business working from home purchased a
second or third car. The car purchase may be an unnecessary expense.
o Scan for large and/or unusual assets and liabilities of an individual. Some
examples of unusual assets and liabilities include the sale of property,
inheritance of a house/cash/car/other assets, additional loans, setting up a new
business, large or very frequent money transfers or deposits,
o In some cases, if an individual's expenses exceed the National Standards8 of
expenses, it may show that an individual has financial difficulties, but not always.
Since the individual provides most of the information on expenses, there is a
possibility that he/she could overstate their expenses to intentionally, or
unintentionally, prove their inability to pay. For example, an individual may
report more expenses than usual in the "necessary" expenses section (e.g.,
excessive food/clothing expenses or travel expenses that an individual could
postpone or avoid). In most cases, use this test as a guide to identify expenses or
income needing further evaluation or explanation,
o On the other hand, an excess of individual's expenses over the National
Standards may mean an individual has a financial hardship and is unable to pay
their environmental obligation. As stated above, this is not the final
determination of ability of pay; rather, it is an approximate determination.
Further analysis such as net worth, cash flow, and debt capacity may provide a
more accurate financial picture of an individual's ability to meet their
environmental obligations.
• Net Worth - does an individual have a positive or negative net worth? This is the
determination of an individual's financial position.
o Net Worth Test - should include the most recent monthly data/information on
the owner because this test gives a snapshot of an individual's financial health at
a specific point in time.
>	Assets greater than liabilities (positive net worth) indicate that an individual
is in good financial health and may be able to pay their debt and may be able
to liquidate (sell) some of their assets to meet additional obligations such as
cleanup costs. An individual, however, may identify certain personal assets
such as a residential house or car as necessary assets. For other assets, you
should conduct a more thorough search and clarify with the individual those
assets that should be included or excluded in the Net Worth analysis. In
addition, you may find it helpful to identify and verify with an individual any
other assets that you should include or exclude from the net worth analysis.
8 See National Standards: Food, Clothing and Other Items Web page at https://www.irs.gov/businesses/smajl-
businesses-self-empjoyed/nationaj-standards-food-clothing-and-other-items
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>	Liabilities greater than assets (negative net worth), indicate that an individual
may have financial hardship with more liabilities than assets. This may
indicate that an individual is unable to liquidate (sell) any assets or use them
as collateral to borrow against to provide funds to fulfill their environmental
obligation. Thus, we recommend you evaluate each asset to identify
necessary assets (e.g., primary residence) versus unnecessary assets (e.g., a
boat or expensive car collection). In some situations, there may be no
liquidity. In others, an individual may be able to pledge some assets as
collateral for a loan.
•	Cash Flow - reports the sources and uses of cash by an individual during a specific
period. For this manual, the time period covered is one year. Can an individual fully,
partially, or not afford payment(s) to cover the environmental obligations?
o Cash Flow Test - input the yearly data/information from an individual and his
family. The test examines cash funds such as salary, dividends, royalties, and
interest that an individual received against expenses during the one-year time
period. In addition, it includes any changes (increases/decreases) to cash
equivalents9 by an individual during the one-year period.
>	The difference between "Cash In" and "Cash Out" is the amount of funds
available to pay additional obligations. If an individual spends more than they
receive, an individual has a negative cash flow. This may be due to
unnecessary expenses, excessive debt, or possible unreported income.
Negative cash flow may indicate an inability to pay, thus, it becomes
important to identify any unnecessary expenses.
>	Positive cash flow may indicate an individual could pay some, if not all, of
their environmental obligations. A final determination, however, calls for
your judgment based on the results of the analysis and specific facts of the
case.
o Future Cash Flow Test - identifies future expected financial information to the
individual and his or her family. The test examines any future expected or
potential income and expenses that an individual might receive or incur in the
future.
•	Debt Capacity Spreadsheet - indicates the amount of money an individual may
borrow to pay the environmental obligation.
o Debt Capacity Test - builds on the Cash Flow Test. It uses the same
data/information on an individual to conduct the Cash Flow Test (i.e., income
and expense information). The ability to repay (or take on) added debt to pay for
the environmental obligation is shown by the debt capacity ratio (%) ranging
9 Cash equivalents are short-term, highly liquid investments with a maturity of three months or less. Examples of
cash equivalents are: foreign currencies, saving accounts, certificates of deposit, commercial paper, marketable
securities, short-money market accounts, short-term government bonds, and treasury bills.
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from less than 10% (excellent ability to take on more debt) to 43% or higher
(inability to take on added debt).10 The Financial Analysis Spreadsheets (Debt
Capacity) incorporate and explain these ratios. Most banks will allow and provide
a loan to an individual with a debt capacity ratio up to 36%. There are some
banks and other financial institutions that allow loans to individuals with a debt
capacity above 36%. EPA recommends 36% as a cut-off ratio for considering
more debt (financing) to manage environmental liabilities.
•	Penalty or Contribution Payment Spreadsheet - how much money, if any, an
individual can afford to pay toward their environmental obligation?
o Test A: Cash Flow - indicates the present value11 of cash flow generated by an
individual over a period of 5 years.12 This test quantifies how much money the
individual can give to meet their environmental obligations over the next 5 years
based on their previous 5 years of generated cash,
o Test B: Debt Capacity - indicates the present value of debt the individual can
take on over a period of 5 years. This test quantifies how much added debt an
individual can take on to fulfill their environmental obligations,
o Test C: Cash Flow and Debt Capacity - combines both Test A and Test B to
provide a more accurate and complete understanding of an individual's financial
ability to meet their environmental obligations.
•	Consider any future assets or expenses that may affect an individual's financial
health in near future. Use your professional judgment whether to include or exclude
them into the Future Cash Flow and Debt Capacity Spreadsheets. For example,
upcoming student loan payments for a child may reduce cash flow of an individual
while a child graduating from college may increase the cash flow in near future.
Step 6: Follow up.
If needed, request missing information from an individual and clarify any unclear or
contradictory information from databases and the Internet to complete the Financial Analysis
Spreadsheet. Some examples:
•	You obtained an individual's savings account bank statement that shows a large
transfer of money (e.g., $50,000) to Company Z. The individual did not list or disclose
Company Z in any documents provided by the individual. In this situation, you should
run a search on Company Z using online sources (see Checklist) to ascertain whether
the individual transferred the $50,000 to a company owned or co-owned by the
same individual, their spouse, or a relative. You should also ask the individual for
clarification on Company Z and request a copy of Company Z's tax return to identify
10	Debt capacity ratio is based on ratios established by The Consumer Financial Protection Bureau and Credit Union
National Association, Inc.
11	Present value (PV) is the current worth of a future sum of money or stream of cash flow given a specified rate of
return.
12	The period of 5 years is a timeframe to be identified by the case team, e.g., 4 years, 3 years, etc.
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and/or confirm the ownership of Company Z. If confirmed through conversation
with the owner and review of Company Z's tax return that the individual wholly
owns Company Z, add the full amount of positive income of Company Z to the
individual's Cash Flow Test. If Company Z is a partnership, add the proportional
amount of the partnership to the individual's Cash Flow Test. This is an example of a
possible asset or profit you could further investigate and include as a source of funds
for environmental liabilities. Depending on the situation, you may find it beneficial
to consult with a financial expert.
•	You learned from Linkedln that an individual listed Company X on his personal
profile as an employer. Company X was not disclosed in any documents (including
tax returns) provided by the individual. You will need to confirm if Company X is an
affiliated business to him/her or a business owned by him/her. In this scenario, you
will run a search on Company X through CLEAR or Dun and Bradstreet.
•	Your search shows that an individual owns stock in Company X. You can determine
whether those assets are available from the Net Worth analysis of the individual's
tax return or requesting the individual's stock certificate from Company X. You may
want to confirm the individual's relationship to Company X by checking the
Secretary of State database. If Company X was incorporated in the current year, it
mostly likely will not show up on the individual's tax return filed in previous years.
Assuming the individual provides the stock certificate showing ownership of some
percentage of common shares in Company X, you should consider including (adding)
this percentage in the Net Worth Spreadsheets as an additional source of
investment assets and add any of the individual's dividends received from Company
X to the Cash Flow Test as cash available.
Update and re-evaluate (due to latest information) the Financial Analysis Spreadsheets.
Step 7: Decide on the best course of action based on spreadsheet results:
The Financial Analysis Spreadsheet give you an estimate of the funds available for the
environmental obligation. The final determination on whether an individual can fulfill the
environmental obligation is case-specific. The final determination a separate and distinct
determination, based on all information gathered and analyzed by using the best judgment
relevant to the individual or case.
The above process of going beyond the INDIPAY screening model should help you assess an
individual's ability to fully, or partially, fulfill their environmental obligation or their inability to
repay the environmental obligation from:
•	Accessing available cash (Test A) (See: pg. 11, Guide)
•	Borrowing funds (Test B) (See: pg. 11, Guide)
•	Combining available cash and borrowing funds (Test C) (See: pg. 11, Guide)
•	Selling unnecessary assets (positive Net Worth Test)
•	Decreasing current and/or planned expenses and investments
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•	Utilizing a combination of all the above
Please note that a negative net worth and a negative cash flow outcome would generally
indicate an inability to pay. There are some situations, however, where a negative net worth
can be viewed as a temporary hardship and not an inability to pay. For example, an individual
may have had large expenses (e.g., machine, equipment, real estate purchases, medical, or
school expenses) to start or support their business and/or family. These expenses are
investments or temporary expenses that could later produce positive revenue to the business
or represent a one-time expense or a discontinued expense.
Taking into consideration that each case has its own distinct facts, and after completion of the
Financial Analysis Spreadsheets, the INDIPAY+ Guide suggests you undertake the following
action(s):
•	Consult with the case team and decide whether additional monitoring13 of an
individual's financial situation is necessary when the case team is uncertain of the
financial health of the individual (negative net worth and positive cash flow or
positive net worth and negative cash flow), or
•	Recommend to the case team to seek full or partial payments from the individual to
fulfill their environmental obligation when you determine an individual has a
positive net worth and/or positive cash flow, or
•	Consult with the case team and suggest closing the case when you determine an
individual is unable to pay (negative net worth and negative cash flow), or,
•	Consider debt capacity, how much access to credit an individual has, how much
money he or she can borrow without any financial problems, and how easily he or
she could exceed their debt capacity if they go over their credit lines (at or above
36%).
•	Document your decision- whatever action(s) (listed above) the case team decided to
take, explain why you chose this action for future reference.
13 Monitoring recommended for up to 3 years from the time you conducted the analysis for large dollar amounts.
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