Socialising on an IVA

[lonely]

I am thinking of an IVA but I am put off because I feel like I will have no life on one. One company told me that in a typical IVA you have £50 per month for other expenditure e.g. socialising or other non-priority expenses. I am not extravagent and I know I have got myself into this mess - but is £12 a week really the most they give you?

[MelanieGiles]

Hi lonely - and welcome to the forum.

When I am interviewing my own clients prior to deciding the best way forward with regard to debt repayment, I am very careful to ensure that clients are left with sufficient money to maintain a reasonable standard of living. This is important if you are to enter into a five year commitment.

I am not an IP who agrees with standard levels of expenditure, as each client will have their own set of circumstances to take into account, but unfortunately this seems to be the way that creditors are going more and more - and some of them are really squeezing allowances to the absolute minimum.

In terms of housekeeping, I generally like to see at least £250 for a single person, with a £50 clothing allowance and £50 to cover miscellaneous expenditure - such as your socialising.

As most insolvency practitioners will put forward and IVA for you without taking up front money from you, why not try the procedure and if it is turned down then look to other options?

If creditors then suggest a restriction on your expendire, and you cannot live to that level of budget, then I suggest you consider bankruptcy or debt management as an alternative, where the creditors do not appear to operate under the same restrictions.

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

[lonely]

What expenditure would come under "housekeeping"?

[MelanieGiles]

Food, cleaning materials, personal toiletries, and social costs.

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

[Skippy]

I wish you were my IP Melanie! My expediture form shows £300 for housekeeping, but as they didn't include my share of the mortgage (they added my partners salary into mine) or car maintainence, we are surviving on £200 per month. And I've only got £25 per month for clothes! Luckily my partner isn't in an IVA, so he is helping me but it's very hard.

What I am trying to say is think very carefully about income and expenditure, and if you can't afford the IVA repayments seriously consider bankruptcy. I wish I had - I have no assets apart from my car and I'm going to be struggling for the next 5 years.

I'm not trying to scare anyone, but I was grateful that I was sorting my problems out, and didn't think of the long term consequences.

Four down, fifty six to go until freedom!

[neverending]

Six of us on £400............wonder why its tough ???
This had to be like this as I was struggling to have enough disposible income to offer above 25p in the £,managed to offer 29p.
Housekeeping is an area that if you can put a fairly genorous amount down and it is accepted then with careful shopping you should be able to "save" some money...believe me there will be a time that you need it.

[MelanieGiles]

No wonder you can't wait for that variation meeting. That is an extremely harsh budget. I would normally expect to see around £650 for a family of six!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[neverending]

Catch 22 Melanie,I didn,t want to go bankrupt because of the formal notice in the paper and the type of job that I,m in.
I really have only survived due to family help and my poor wife going without.

[rich25]

i thought that food/housekeeping was based on 150£ per adult adn 120 for every child after. is that not correct????

[scaredkez]

in my proposal i was only being allowed £400 for a family of five, and that included my husband working away money, school meals (they take their own) and me taking my meals to work with me.
kerri

[MelanieGiles]

There should be no benchmarks - you should put down what you actually spend. If the creditors don't like the figure then that is their choice, but you are only kidding yourselves if you go in at a lower figure and no wonder some of you are struggling and considering going bankrupt.

In my book if the creditors force you into accepting higher figures, you ought to seriously consider the alternatives. It is interesting to note that there is little ongoing scrutiny of either income or expenditure under Debt Management Programmes or Bankruptcy.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[rich25]

just out of interest is there a set miles to £ ratio for petrol????? I also thought clothes was 25£ per adult.

[MelanieGiles]

Rich

There are some creditors who operate a set of benchmarks, and these are quite different depending upon who you talk to. A clever insolvency practioner will get to the bottom of his/her client's actual expenditure, and justify that within the proposal documents.

The starting point should always be what you spend. So if you spend £25 for clothing then that is OK, but if you spend £75 because you have to be smartly dressed for work then that is also OK. With regard to your petrol expenditure, this also cannot be benchmarked as it will be higher if you are driving a RangeRover than a Mini.

Creditors are indeed getting harder in what they deem is allowable - see my latest blog for further comment on this - however if they seek an increase in payments through reducing certain areas of expenditure, you must all consider that very carefully before accepting.

Notwithstanding my high personal success rate at getting client's proposals accepted at creditors meetings, during the last month I have had two clients withdrawing their offers as they felt that creditors were seeking unfair increases. That is a much better decision for them and I, as they will now go bankrupt knowing that they tried to pay creditors back something, and will not have a failed case on my books in six months. Creditors also need to be re-educated in terms of living expenses, it is just a shame that increased bankruptcy statistics seem to be the only way to get some of them to listen at the moment.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[scaredkez]

it is ironic really isn't it melanie as the majority of my creditors are now excepting £5 per month uner the DMP be it only for 6 months as they stated,but i was able to put my true figures down of what i really needed as minimum to run the house and give them some return, in the same respect NR wouldn't have anything to do with a dmp and i am still paying them the full amount, i am sure it won't be long before the other creditors pick up on it but i made it look like a secured loan on my SOA so i could try and so something at least.
the IP did fix my figures so i could offer a bigger return which i told them i wasn't happy about but they said well it won't be accepted, being desperate i agreed but in the end it got me knowhere anyway, which is a good thing as i would be struggling now to pay.
kerri

[MelanieGiles]

Kerri

What do you mean about a "secured loan on your SOA"? Can you clarify that point for me please.

I agree that creditors have been very uncommercial in your case, but I do wonder if your IVA proposal was presented in the best manner. You could always have another go if you could bear it!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk