OR's disposable income calculation & allowances

[chris.g]

[:(!][V], My hubby's just had he's telephone meeting with the OR. According to them, our disposable income is £180 therefore the payment required from hubby is £90 per month for the next 36 months. Fair enough if we had £180 disposable income!!! OR stated that as our 2 eldest children board has to be included in the income, makes sense. However, our grocery costs cannot take into account the 2 eldest as they contribute to the house!! They also didn't ask about household insurance, life assurance, travelling expenses or petrol costs. Commented on the school dinner costs and asked if kids could come home for dinner- I work 2 days of the week and the school won't allow the kids to stay just for these days, it's the full week or nothing. Won't allow for mobiles or landline/cable/broadband as they class them as luxuaries. Does this seem harsh to anyone else or is it just me??

[debbiw]

Hi Chris, This does seem quite harsh. Did you question anything that the OR had said?
Skippy will be along soon, she will be able to advise you better

[ianmillington]

This does seem a bit harsh, Chris.

I assume that the OR is looking at an Income Payments Agreement rather than an order at this stage?

The OR is an Officer of the Court and has a legal obligation to treat everyone including your husband with the utmost fairness. It is inherently unfair to treat the board and lodgings your children pay you as income and then deny a deduction for the food they consume in the process. Certainly your travelling/petrol expenses should be taken into account, otherwise how will you get to work? The reference to a landline being a "luxury" is, quite frankly, ludicrous in the extreme.

I suggest your husbands examiner's handling of the interview should be reviewed. Ring the person up and ask him/her to reconsider and bring the additional expenses into the discussion (I assume they were disclosed in the Petition documentation?). If the examiner refuses to budge, you need to speak to one of the Assistant Official Receivers to ask for the matter to be reviewed.

ian

[chris.g]

It was my hubby and he didn't question what she said, much to my amazement! I've tried to figure out where how she has got that amount and can't but as mine is tomorrow, I'll question the amount-assuming, as the I&E are the same, the same amount will be found.

[ianmillington]

One other thing, Chris

In your earlier post you refer to "our" income. Is that right? The OR should not really be taking account of the income of someone who is not a party to the Bankruptcy. Effectively has your income been taken into account in determining your husbands contributions?

[mish1953]

Hi Chris
How old are your kids ?

Presumably the school dinners etc are for younger kids ?

cheers
Mish

[Reviva UK]

Hi

sounds like it was a little rough - HOWEVER what he said doesn't necessarily mean it will happen. You haven't signed anything yet so you have not formally made an INCOME PAYMENT AGREEMENT.

I suggest that you carefully list all the income & expenses and resend these to the OR and discuss it on the phone.

You actually may want to review your costs as you mighthave been optimistic about some of these and actually haven't claimed your full allowances - i.e.


RENT / Mortgage £ X
rent / mortgage arrears £ X
Council Tax + arrears £ X
gas £ 58
electricity £ 58
these have just had another huge rise of 15%
water £20 - 25
telephone £55 ish
if you get internet thrown in then that is fine
you might also argue that if the children are of school age they need the WWW to do homework etc.
Travelling children to school £
other essential journey to work etc £
adult clothing need some allowance £
children allowance £
children shoes - £ 10 pm per child
Contents insurance
buildings insurance ( only if mortgage)
tv licence £11
car tax
car insurance
car servicing - depending on age of car £25
birthdays £10
christmas - yes you are allowed on!! £X
prescriptions
union fees - sometimes compulsory
AA membership
pet food
pet insurance

food is £150 for 1st person in house + £100 per each addition person. So 5 people would be £550.
However these allowances are several years old so I would suggest that you increase these slightly to say £580.

if anyone has special dietry needs ( not lots of cake like my diet!) then there is usually an extra cost for this and is allowed.

Petrol - you need to make sure that if you have a car you actually estimate the right amount of fuel used - if you underestimate you will run into trouble early on in the IPA.

Perhaps if you have the time why not post the figures that were discussed and the forum can comment.

Hope this helps

[chris.g]

I work part-time, term-time through an agency and so earn approx £180 during term times only. As my hubby is the main earner and supports us all, the I&E is the same for him as it is for me. To be honest, all the money goes into the bank and the bills get paid. Our eldest kids are 21 & 19, paying £80 each per month board, and our youngest are 11 & 7.

[jane.l]

Don’t want to hijack this thread but I also need advice and it is relevant!

We are both bankrupt and have been put forward for early discharge. We did not have an IPA at the beginning but from the recent I&E form we sent in, the OR has sent us an IPA form for £52 per month for 36 months. Our surplus was £20 according to our I&E. I asked for a written breakdown, which was like extracting blood from a stone, but its arrived today.

Most of it is fair enough but they have really slashed the food bill, to £453 for 2 adults and 3 teenagers and 2 cats.

OR has said NO to:

Opticians (I have raised eye pressures and NEED frequent exams, hubby has diabetes in his family and he wears glasses, how are we to fund this???)

NO house insurance

NO budget for school meals, trips, etc, that, I suppose they want us to fund from the food budget!

We are not going to sign this AGREEMENT but what are the chances of it going to court and we’ll have to pay more?

JUST TO ADD, we are not allowed holidays, Xmas, contingency fund or birthdays!


I am so worried

[Skippy]

That does seem really harsh Chris. I can't understand why they didn't ask about travelling costs. I haven't got children, so I can't comment on the way they have worked out your eldest's board - hopefully Melanie will be able to advise you.

I think a few people on here have had a problem with being asked for payments that they can't afford.

Sorry, I typed this before I went to lunch and didn't send it [:I]

[chris.g]

Here goes...I've averaged out my wages and school dinner's over the year
Income monthly
hubby's wages 1200.00
my income 97.50
benefits, TC&WTC 477.52
child ben 130.86
board/lodgings 160.00
child maint' 44.00
total 2109.88

Expenditure monthly
rent 460.00
council tax 83.00
water rates 26.67
electricity 50.00
gas 50.00
phone, inc tv &
b/band 40.00
tv license 11.61
life assurance 30.00
contents 25.00
pet ins 12.00
car ins inc aa 25.00
petrol 75.00
food/h'keeping 600.00
school dinners 39.00
clothing 80.00
mobiles 70.00

total 1777.28

this leaves £332.60-if my sums are correct.
I was advised that any benefits are not included so therefore as there are benefits of £477.52 is it correct to assume that there isn't any disposable income?

[ianmillington]

Jane

If you don't sign it it may harm the application for early discharge.

It does sound a bit harsh and somewhat cynically I'm beginning to wonder whether in some instances the OR is trying to drum up the money to meet his admin fee. Clearly for the forum members to comment we'd need to see the full income and expenditure.

Both Jane and Chris - If you and the OR can't agree, then the OR can go for an Income Payments Order. Under S310(2) IA 1986 the Court shall not make the Order to reduce your income below that "what appears to the Court to be necessary for meeting the reasonable domestic needs of the bankrupt and his family"

It is therefore quite possible that if it were to go to Court the District Judge would find in your favour. However, clearly the best option will always be to reach an agreement you can live with if you can. If we've got full I&E datails then we ought to be able to give you an idea.

Ian

Chris

I didn't see your latest post until I had already typed mine. You are on means tested benefit - My initial thoughts were that that would appear to rule out an Income Payments Order/agreement. However, my research suggest that that's the case where benefit is the only or main source of income. Clearly though it's a factor. See this link

http://www.insolvency.gov.uk/
freedomofinformation/technical/asehelpmanual/
I/IncomePaymentsAgreements.htm

[chris.g]

I'm a bit confused, Ian, does that mean that the OR can include my benefits or not??

[jane.l]

I am not really bothered about early discharge,to be honest,
I would rather be able to live without having to get into
debt again! It took nearly 20 years of struggling get to the
bankrupt stage, we had one wage for years and no benefits so we ended up borrowing to live! Dont want to go there again

[jane.l]

THIS IS THE I&E FROM THE OR

we are 2 adults and 3 teenagers

Rent £575 (to increase in March)
Council tax £117 (to increase in April)
Gas/electric £90
Water £75 meter
Telephone £46
Housekeeping £453
Travelling £190 (this is car ins, car maintenance, car tax & petrol on an old banger)
Clothing £80
TV licence £12
Dentist £10
Prescriptions £13
Pet food £20
Haircuts £29

TOTAL £1754
Disposable income £105


INCOME =
WAGE £1859
Child Benefit £120 to go down to one child in May

So they have not calculated CB in the IPA figures but there is no budget for school meals, trips, birthdays, contingency, house insurance and opticians


I really don’t know what to do, I am not bothered about Early Discharge so may just contest and hope we don’t end up paying more!