Expenditure

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Skippy

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Post by Skippy » Wed Jan 24, 2007 9:03 pm
Please can the experts help me?

I have been finding myself short of money, and I have gone through my income and expenditure form to try and work out why. Please can I have your opinions on a couple of things I'm not sure about:

1. Although the IVA is in my name they have included £560 of my partner's income. The expenditure form shows the mortgage of £556 and states that it is solely in my partners name, even though I advised that I actually pay £200 per month rent to him. This means that I am £200 short per month and had to shuffle the rest of the figures around.

2. Gas - £40. We don't have gas in our flat! I did query this, but I was told not to worry about it.

As I said, I don't live to the same figures in my proposal, some are higher, some are lower, and some like the gas don't exist. When I fill out my income and expenditure form for my review do I use the figures in the original form, or do I use my figures and increase them according to my cost of living, which seems to be going up and up?

I know it's a long way off, but I'm worrying about it. I have been sitting here crying tonight as I don't know how I am going to cope for the next 5 years. Any help would be much appreciated as I was on the verge of petitioning for bankruptcy.

Three down, fifty seven to go until freedom!
 
 

MelanieGiles

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Post by MelanieGiles » Wed Jan 24, 2007 9:18 pm
Skippy - this doesn't sound like you. Crying! You are one of the strongest people on this forum. I hate to think of you being upset.

To be able to advise you properly, I would need to see a detailed breakdown of your income and expenditure, however I have the following observations:-

1 Your partner's income has been taken into account, as I suspect you are living as a couple rather than just flatmates. In these circumstances, both parties incomes are calculated to identify the percentage split of individual income versus total income, which is then applied to overall expenditure (at least that is what I do in my cases). So if your partner is bringing in two thirds of the income, they should be paying two thirds of the mortgage and other shared costs. If your IP has used a different basis of calculation, that that is not necessarily wrong but you will need to confirm this with hime/her directly. I do not understand how your share of the mortgage, or rent as you call it, has been calculated.

2 If your IP has included an expenditure item which is not correct, after you told them this was not correct, then you should increase your payments accordingly by £40. I appreciate that this is not helpful at present, but do bear in mind that you are legally obliged to make accurate declarations of fact to your creditors, and it is an offence to make false declarations. If it is your IP who has led you to include false expenditure, which seems to be suggested from your note, then that is more serious. You must use correct figures, or you are just kidding yourself, your IP and ultimately your creditors. You should ask your IP to amend this when they file their next annual report, and specifially draw creditors attention to the error.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk
Regards, Melanie Giles, Insolvency Practitioner
 
 

Skippy

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Post by Skippy » Wed Jan 24, 2007 9:50 pm
Thanks Melanie. I'm so worried about this - what will happen to me for making a false declaration? If they ask for any more money from me I am going to have to let my IVA fail - will my IP petition me for bankruptcy if that happens? Here is a breakdown of my income and expenditure as per the form:

Income: £1285
Drawings (Partner's Income): £560
Total: £1844

Mortgage (Property is owned by partner and the mortgage is his sole responsibility): £556
Buildings / Contents Insurance: £8
Council Tax: £110 (That is the full council tax bill)
Gas: £40
Electricity: £40
Home Telephone: £40
Mobile Phone (Two phones): £50 (I only have one phone at £35-£40 per month, again I pointed this out)
Medical Expenses (Contact Lenses and Chiropractor): £35 (I no longer see the chiropractor but need to save for dental bills and glasses. I also may need to see the chiropractor in the future)
Food, Toiletries and Cleaning Products: £300
Clothing: £40
TV Licence: £11
Vehicle Petrol: £120
Vehicle Insurance: £20
Vehicle Road Tax: £15
Total Expenditure: £1385
Surplus available for creditors: £459

These are the figures that I live to:
Income: £1285
IVA: £459
Mortgage / Rent / Bills: £260
Council Tax: £50 (amended)
Mobile phone: £40 (Worst case figure)
Medical Expenses: £35 (Including monthly contact lenses)
Food, Toiletries and Cleaning Products: £200
Clothing: £25
Vehicle Petrol: £100
Vehicle Insurance: £30 (Already paid for in full last year, but I am trying to save this for this year's insurance)
Vehicle Road Tax: £15
Car Maintainance Fund: £35 (Not included in proposal, but I don't know how else to save for unforseen problems, or servicing and MOT)
Fridge Freezer Insurance: £12 (This is only until June 2007. I did mention this when I first started the IVA procedure)

This leaves £25, which is my 'contigency fund'. I am so scared - if they want any more money off me, there is no way I can do it.

I would be really greatful for your thoughts Melanie. I think I will ring Accuma tomorrow about this - I would rather get it sorted out sooner rather than later.

Thank you for you nice comments - you made me cry again!!! I usually am strong, but everything has gone so wrong in the last few days that I feel I can't cope any more. My uncle is terminally ill and won't be here much longer, and I feel guilty about worrying about money. I know there is more to life than money, but everything seems to be mounting up at the moment. Oh well, what doesn't break us makes us stronger.


Three down, fifty seven to go until freedom!
Last edited by Skippy on Thu Jan 25, 2007 10:26 am, edited 1 time in total.
 
 

freelili

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Post by freelili » Wed Jan 24, 2007 10:05 pm
Oh skippy, you are in my thoughts, you need money to live, please dont worry and its ok to cry, we laugh when we are happy dont we?

Take care, so grateful for melanie

LILY
Last edited by freelili on Wed Jan 24, 2007 10:21 pm, edited 1 time in total.
LILY

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Skippy

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Post by Skippy » Wed Jan 24, 2007 10:34 pm
Thanks Lily. I know I'll get through this, but I was just coming to terms with living in an IVA, and now I don't know whether I'm coming or going - I'm sure you know the feeling.

I have spoken to my poor long suffering partner and we have agreed that if I should be paying an extra £40 per month then I will go bankrupt. Not ideal, but I don't really have any option - there is no more money! I don't have any assets apart from my car, and if I have to sell it so be it.

Hopefully my hysterical half hour has passed - I can usually laugh at things (even if they are not funny to other people - I'm warped!), but this was too much on top of my uncle being so ill.

One thing I would say to everyone thinking about an IVA is - READ YOUR PROPOSAL CAREFULLY! If you are not comfortable with something, get it changed, even if you are told it is ok. If I had done that, I wouldn't be back in limbo. I fell into the trap of being so happy that something was being done that I just went along with it. Isn't hindsight a wonderful thing?!

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MelanieGiles

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Post by MelanieGiles » Wed Jan 24, 2007 10:54 pm
Skippy

Don't you worry about making a false declaration - I would let Accuma deal with this if they knew you didn't pay for gas but still included the expenditure listing for it in your proposal.

If I had been presenting your IVA, I would have applied a percentage of your income ratio to the joint expenditure. You currently earn 70% of your household budget, as I note you partner's only income is £560 from drawings (I assume he is self-employed?). Is this correct?

If so, the you should be allocated as paying 70% of the shared household expenses, which I calulate at £970, therefore leaving you with a surplus of £315 to offer to your creditors. How much do you actually owe? It may be that £315 would not have made a minimum dividend, so monies are presently being "borrowed" from your partner. This is quite common, so long as he agreed to this at the time!

If you are paying £459, then your partner is supplementing your IVA payments to the tune of £144 per month, and I note that you have no contingency within the figures, which I always include as £50 and this appears to be acceptable to creditors.

It may be that Accuma presented your proposals in exactly the same way I would have (there is no right and wrong answer, I just find my way is fairer to all parties and widely acceptable to creditors), but that creditors sought an increase in payments on the day of the creditors' meeting. If this is the case then that is quite unfair on their part, as they are effectively asking your partner to pay more for debts to which he has no responsibility.

As you rightly have pointed out, you also made no allowance for car maintenance (I think £35 is reasonable), and this can be offset against the error with regard to gas expenditure, so I don't think that is now a problem.

Accuma are the experts with regard to your individual proposal. They will know the history, and will understand some of the decisions which were made in putting together your documents and accepting modifications at the creditors meeting. Try and speak directly to the IP or a Senior Manager to discuss your concerns, because on paper I can see why you are struggling.

In the event that this cannot be resolved, then you may wish to consider bankruptcy as an option, in which case none of your partner's income will be taken into consideration in calculating ongoing payments. My gut feeling in bankruptcy, is that you would be required to make payments of approximately £200 per month for three years, but this would ultimately be the decision of the Official Receiver.

Sleep well and tackle this head on tomorrow!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk
Regards, Melanie Giles, Insolvency Practitioner
 
 

freelili

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Post by freelili » Wed Jan 24, 2007 10:55 pm
Skippy

I know what you mean, chuck. I have a warped sense of humour also. Why dont the creditors just line us up and shoot us all? LOL. Oh, they wouldnt get any money out of us would they, der. Post men would be out of a job and there would be too many trees, the planet would choke. No, on second thoughts we are actually saving the planet. You laugh until you cry and cry until you laugh, talk about being muxed ip.
I am phoning the asylum tomorrow, I promise.

LILY
Last edited by freelili on Wed Jan 24, 2007 10:59 pm, edited 1 time in total.
LILY

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Skippy

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Post by Skippy » Wed Jan 24, 2007 10:58 pm
I'll see you there Lily!!! Just think, at least we are keeping people in jobs - postmen, debt collectors, the list is endless!

Three down, fifty seven to go until freedom!
 
 

scaredkez

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Post by scaredkez » Wed Jan 24, 2007 11:44 pm
dearest skippy and lily i too will be in the asylum tomorrow, skippy the proposal is like mine making things up to make the proposal sound better, although unlike u mine didn't get approved of which i am glad i couldn't have made the payments, this is why we have to be certain that the proposal set out should be what we can afford to live on each month,what is going wrong here? we ask for help and it seems the figures are made up to presume we can lawfully take out these iva's i really do fell for u skippy hang in there i know i woul;dn't have coped for 5 yrs on my proposal i really feel 4 u
kerri
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zoe

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Post by zoe » Thu Jan 25, 2007 9:26 am
This has me a bit confused.
I am married, and we share the bills in the house.
None of the debts are in his name and he earns about £150 more than me a month but we split things right down the middle is this wrong?
Zoe
 
 

Skippy

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Post by Skippy » Thu Jan 25, 2007 10:25 am
Well, I have spoken to my case manager and have been advised not to worry about the gas bill - as there is no car maintainence allowance they have rejigged the figures to allow for it. I have looked through the figures again, and while some of them are a bit out, the totals do add up, and after speaking to my supervisor they are happy with them. When I do my income and expenditure review in October I can make sure the figures actually relate to the things I pay, rather than the total being correct but the breakdown being skewy.

Thanks for listening to my ranting last night, and thanks for your kind words and advice - no more tears today, I'm saving them for more important things like my uncle. I will get through the next five years!

Three down, fifty seven to go until freedom!
 
 

MelanieGiles

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Post by MelanieGiles » Thu Jan 25, 2007 10:48 am
Note to Zoe

It is not wrong the way you and your husband split the expenditure 50/50, but if he earns twice as much as you, your creditors may feel that you are paying an unfair proportion of the bills. And do remember you have to justify the expenditure to them at the end of the day.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk
Regards, Melanie Giles, Insolvency Practitioner
 
 

Skippy

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Post by Skippy » Thu Jan 25, 2007 6:36 pm
Can I just say that Accuma were very efficient and helpful this morning. I spoke to a case manager, and within an hour he had spoken to my supervisor and put my mind at rest. I was worried that it would drag on, but I feel much happier now!

I wanted to say this, as it's so easy to complain (I'm good at that!) and be negative, but not always so easy to praise.

Three down, fifty seven to go until freedom!
 
 

Dominic

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Post by Dominic » Thu Jan 25, 2007 8:01 pm
Glad to hear things got sorted out Skippy
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