When applying for an IVA obviously one needs to itemise one's outgoings.
However, have the creditors the right to insist that non-essentials (Sky TV, mobile phone, broadband etc) be discarded prior to an agreement being made?
And what outgoings are factored into the overall equation? Obviously things such as food, fuel etc. but what if a certain amount is already being spent on things such as the above?
You are allowed the basis Sky and Internet packages, and can top these up if you like from your Sports, Hobbies and Entertainments budget. It is fair to say that some changes may have to be made to your budget, but if it is poor budgeting that has got you into the pickle into the first place, this is probably something that you will want to do in any case.
IVAs are not meant to being a drachonian existence for the next five years, but creditors are not going to support you living in a lap of luxury either. It is down to you to state what you need to spend, but then down to creditors to decide whether to accept that expenditure at the end of the day.
Look at the CCCS guidelines link that Viki has sent you, to ensure that you are using the correct areas for your expenditure.
Basically you will be required to live within certain financial limits (so much for this, so much for that etc..) and if your proposal provides for expenditure over those limits without specific justification then expect it to be modified at the creditors meeting. Typically that will apply to things that cannot be accurately worked out(the weekly shopping bill for example) but certain items of course cannot be negotiated (gas/rent/council tax etc.) and once verified by the IP will be accepted as fact by the creditors. I have seen attempts by the odd creditor to force contributions up by reducing the petrol bill - inappropriate in these days of high fuel costs but when challenged there has always been a U-turn.
The convention is that if you have Sky, you will be able to have the basic package allowed in your income and expenditure. Same applies to mobile phones - if you have a contract, better stick with it because you won't get another. The key is not to go crazy with it.
A good call by Viki referring you to the CCCS guidelines. Before committing yourself to anything, make sure you have covered all your items of expenditure, although it is fair to say that the creditors may well expect you to meet some of the items (eg alcohol) listed out of any contingency that has been built into the proposal. And, yes, I have seen an IVA approved that incorporated payments for private school fees! However, that was a few years ago and I suspect it would be unlikely to get past the creditors nowadays.
Ian
Last edited by ianmillington on Mon Sep 22, 2008 10:18 am, edited 1 time in total.
Ian Millington
Insolvency Director
PDHL Ltd (formerly Personal Debt Helpline Ltd) www.pdhl.co.uk
School fees are a definate no-no Ian, unless the child is at a critical stage of their education such as in 11+ or GSCE year. Interestingly there is more sympathy for this in bankruptcy cases following the test case of a couple of years ago you will be familiar with. Yet another example of the widening gap between both personal insolvency procedures.
