I understand about 10% and 50% rules in extra income. However if I manage to accumulate savings by eating beans on toast and being extra frugal would they have to be handed over to IP at the review.
You are allowed to have a small amount of savings. There is no fixed sum, but obviously not shed loads of money!
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I do not think the £50 allowance per person(as revealled in most I/E plans mentioned here in the forum here) as a contingency is adequate, and so in the real life IVA cases people have to save their other pots of budget to make it work. There has been examples cited in this forum here of suddent cost emerging that has thrown people back - funeral cost,new child, new motoring parts etc.The contingencies cannot adequately cater for those cost as documented by real life people and requiring a creditors decree of a reduction in payment which are added on to the 5 yr period. If your car breaksdown and requires a repair bill of £250, that could be 2.3 months of contingency for a married couple but 5 months for a single person.That's fact.Or it comes out of your other pots like household expenditure.
Unless you don't drive, have no repair cost to property and children, then maybe 50 a month saved per adult may be OK....not a typical IVA family scenic picure. Kids cost money they say it cost 164K to raise a child to 16.
Beans on toast good on you, save your moneies for that rainy day and in the cliamate we are in more will come.....bet on it...just look at the weather to start with...
Last edited by 2012 on Mon Sep 08, 2008 2:51 pm, edited 1 time in total.
"Why do we buy junk and say it is not what we need but what we want?"
I am still considering IVA but this was the disadvantage I could forsee. That there did not appear any advantage in trying to work harder. Also as you say a lot of credit card debt is because we dont have savings due to the cost of living, so not to have a fall back is tempting fate. Anyone who has children does not have 100%control over their spending. thanks for advice.
This is certainly one of the disadvantages of an IVA, that you are living on a very tight budget with all expenditure and income accounted for. And, you are right, there is no advantage to work harder other (of course) that it gives you more money to pay back your creditors with. Your life, therefore, does tend to go on hold for five or six years.
The period whilst the IVA is being set up, when you stop paying your creditors, should be a period to be taken advantage of to put some money aside for a 'contigency' fund ... and part of the fun (yes fun!) of an IVA is learning how to save money and going back to keeping any spare pennies in a jar [:)] It can be a great sense of achievement!
When making such a decision one has to look at what the alternatives are ... namely IVA or BR ... and which is the better way forward.
What £50 contingency allowance? Under CCCS guidelines and the CFS, there are several areas allowed for contingency depending upon your circumstances and the size of the household.
Do remember that you have to live a reasonable existence during the IVA or else you will just get fed up of it and potentially it could fail. If you feel that you may not be allowed sufficient disposable income to live on then think very seriously about whether this is the right option for you.
