A Question About Savings:

[Amud]

Hi all,

First of all - pleasure to meet you all. I hope you're all well .

I signed into an IVA last year in June with Credtfix, and, as such, I'm in the run up to my annual review. Despite trying not to think about it, I am - and I can't help but worry.

My first question is:
When I signed the Chairman's Report, they had included my wages in the income/expenditure as £1300 a month - as it was a relatively new job. However, since working there for some time now, it's averaged around £1400. I haven't declared this because, to be honest, when I do my own Income and Expenditure for the month, I'm still just about scraping by - even on the additional £100. Could this potentially be an issue, or, when I present them with a breakdown of my Income and Expenditure and Bank Statements come June, and they see it balancing itself out, will they accept it?

I must add, they included my partner's income too in the Income/Expenditure form, so everything is pretty much doubled (in terms of calculating our expenses the first time - such as Food at £500 a month instead of I imagine £250 just for me) to account for her wages too.

My second question is:
There's a section within the formal Income/Expenditure form that is listed as 'Essential Expenditure', and includes the likes of Rent, Council Tax, Gas, Electricity etc. Within this section, there is a 'Other', with £217 noted for 'Other' expenses, and is listed as essential like I say.

With that being said, I try and put aside £80-£100 each month for emergencies (not savings!) incase of one. This could include anything, such as but not limited to: - appliance breakdown, to cover sick pay, etc.

I say sick pay as I'm only entitled to SSP, and that's after 3 days of being off. So if I'm off sick for unexpected reasons, my wage for the month will drop significantly. So, with the money I set aside (the £80 - £100 a month) I do it with this intention in mind.

With that being said, come June, could Creditfix possibly be annoyed with this and tell me not to? As, it's within the form itself - they listed £200 aside as 'Other', so surely I'm fully within my rights to do so? Furthermore, I do it with the intention of being smart with my money in the future, in that, given an unexpected cost arising, I'll have that money to fall back on and as a result ain't break my IVA or struggle.

Thanks for any help and input, and pleasure to meet you all again!

Thanks!

[Foggy]

Creditfix are a law unto themselves as to how they do anything, so it is difficult to comment. It will also depend on how this wage is made up .... is the basic pay higher than you first thought, or are there overtime and bonus / commission payments in there too ?

Usually a spouses income is used just to calculate their fair share of expenses, so, say, if you earn about the same as each other you would be expected to pay half of the expenses each. For instance if the agreed household expenses was £500 for the monthly groceries etc., she would be expected to pay out £250 and so would you. So (for simplicity this is your only expense and your salary each month is a meagre £450) your income would be £450 -- expenses would be £250, making your IVA payment ( your 'disposable income') £200 ---- so your spouse is not actually paying anything directly towards your IVA but allowing you to pay more by shouldering a share of expenses. I have highlighted "usually" because there are a few firms that DO add in a spouses income ( and sometimes working children) to base the IVA payment on household income rather than individual income.

With regard to your second question -- again CF cut free and loose with these things and, to be honest, I am surprised that creditors accepted this in the first place! Emergencies or contingency savings usually fall in the realm of £10 - £20 ! That said they might well have lumped in other things like car repairs, entertainment or a multitude of other things. The way you intend to treat this strikes me as sensible and they cannot really complain ( after all THEY put it in there!).

[Amud]

Much appreciated for the quick reply, Foggy!

The additional £100 is in the wage in itself, not overtime or additional payments/bonuses unfortunately.

I read and understood that I could earn up to an additional 10% as a result of overtime/bonuses etc, and that anything above that would then be split 50/50. But unfortunately this is within the wage.

With that being said though, like I say, even given this additional £100, I can pretty much produce them a document of my income/expenditure and bank statements to show and justify that, despite this increase, I'm still left with very, very little.

In speaking of my partner being involved, it's strange because, on initial talks they stated they only needed it to, like you say, calculate their fare share of expenses. However, is it normal to then add her wage on top of mine on the IE Form (so £1300 me and £1900 her, totalling £3200) and then have all the income and expenditure deducted from this total? Because that, to me, is full on including her - nevermind just to calculate their fare share of expenses. Furthermore, she drives, and I don't, so they also included detail of expenditure in the form of 'fuel', 'MOT' and things like that.

With that being said, is it normal for there to be such a detailed breakdown with regards to her aswell?

Last of all, in referencing the putting money aside for emergencies, £217 definitely is a lot then if they only usually put forward £10 or £20. But like I say, it's there - so surely I'm fully withiny right!

With that being said though, could they then amend this come the annual review, reducing that amount to £100 for instance, and expect me to then pay in the £80-£100 I am able to save? Or can I argue it, given that it was originally agreed and signed upon by the creditors?

To add to that too, the car repairs, entertainment and multitude of other things that you say might be included in that £200 all actually have their own category somewhere else in the IE Form!

Thanks again!

Oh and also of all, do we know how picky Creditfix are with Annual Reviews? Do they often try and lump up the payment, or do they actually have their customers best interests at heart?

[Foggy]

It would appear that they ARE using 'household income' in the same way that Payplan do --- this is far from usual, but, you agreed to the calculations at the start, so they cannot be argued now. In theory they could also put up your payment by this extra £100 per month and, indeed, ask for back payment. Overtime and bonus payments get the '10% 50/50' treatment, basic pay increases do not.

As mentioned CF are free and loose with calculations, and, from other posters in the past, seem to be fairly relaxed about reviews, once everything has been set up. But they are unpredictable and you have to deal with things as they arise rather than rely on what most other firms do.

Absorbing this £100 by increasing expenses is easier said than done --- in practice all firms are far more agreeable to increasing your IVA payment, rather than increasing agreed expenses !

With regard to the extra expense of 'Other' --- rather than save this in the bank, I would be inclined to draw it out monthly and use the 'Bank of Mattress' .

[luluj]

I would echo Foggys last piece of advice ... money kept over each month, withdraw from bank and have it an envelope for a rainy day at home. Its your allowance, but I wouldn't give CF any opportunity to try and claim it back.