Is this too low?

[Martha07]

I jusy had a call from Clearstart who are proposing my IVA. I filled in a I+E form and sent that into them which worked out we had a disposable income of £280 to pay into the IVA. Clearstart have now said that we have put some things on our I+E as too low ie. weekly shopping and that they were going to propose £188 on our debts of £34k. This seems to low in my opinion and I thought that it would be unlikely to be accepted however the man at clearstart said that they would not propose it if it was unlikley to be accepted. He also said this worked out at about 27p in the £.

[Hull_Tiger]

Hi,
I'm not an expert, but reading from what other people have stated on this forum, it would probably depend on your circumstances and who your main creditors are.
Could you give a list and perhaps one the 'resident' IPs can give you the benefit of their experience.
Good Luck

[MelanieGiles]

At the end of the day they should be relying upon your information, and not theirs! If you feel that you could afford £280 per month, then that is the figure which should be proposed to creditors, but do make sure that you have provided for all contingencies and reasonable living expenses. At the end of the day your IP is probably referring to the commonly used CCCS guidelines, but if you don't generally spend as much as those allowances, you should not say that you do.

[ianmillington]

This may be something to do with the fact that the profession as a whole now has to go on the CCCS I&E guidelines for consumer IVAs due to TIX requirements. Typically if an item of expenditure is set to high, it will be modified to reduce it and so increase contributions. If a figure is significantly below the CCCS guidelines then arguably it's unrealistic.

If Martha would care to post the changes from and to I'll be happy to take a look.

Ian

[Martha07]

I think they are trying to allow for reasonable living expenses. We are so used to living on a tight budget we don't spend as much as perhaps many people do. I am justy worried that our IVA will be rejected because the payment is too low. Our main creditors are benficial finance and LLoyds TSb

[MelanieGiles]

Martha

Do you owe more than 75% of the aggregate debt to Lloyds TSB? And with regard to yoru payments, don't worry about the offer being too low, just make sure that you can afford the payments in the long-term.

[Martha07]

No melanie. We owe £34k in total with £14k to benficial finance and £10k to TSS with the remaining £10k to various store cards, HSBC over draft and credit cards.

[ianmillington]

HSBC currently require 40p in the £. How much do you owe them?

I have concluded that you don't owe anything to HBOS, NatWest or RBS. That right?

Ian

[Martha07]

Yeah thats right. We owe HSBC £6000

[maxdebt]

Martha I had similar concerns when my IP proposed a 25p/£ return to my creditors. I had my doubts, wanting to offer more, terrified my proposal would be regected but it turned out my IP was spot on and my proposal was accepted ( LloydsTSB, Barclays, Goldfish my main creditors) I guess it comes down to trusting your IP

[ianmillington]

Ok so assuming HSBC vote to accept but push for 40p in the £ you will need £18k plus voting for the proposal without a modification to the dividend. Based upon the voting rights it's do-able. However, there is a risk that Lloyds TSB and Beneficial (KPMG and Grant Thornton respectively) will consider the contribution to be too low.

If you believe you can pay more than the £188 per month then that might help acceptance but you will need to be realistic. You need to talk turkey with Clearstart who, obviously, have greater knowledge of your personal finances than we do.

Ian