We are new to all this and still in the process of DMP/IVA (will do one short term then the other). Our question is around savings, how much are acceptable? I'm not talking about savings already accrued, I mean once we're in the DMP or IVA. Is there a certain amount or percentage of salary we can save without the IP getting upset with us? Both me and my husband will be in a joint agreement, we'd like to both have an emergency savings account (£50 each) and I'd like a holiday savings account too (£50). Would it be best to not use a savings account and just take this cash out? Or is it okay to have a savings account for emergencies and forward planning? I'm very worried before entering such agreement about not having any kind of safety net, we both have second hand cars and so we need money available if work is needed (or god forbid we need to buy a different car). Many thanks
You can build up savings from your share of overtime but other than that I doubt creditors will allow you much wriggle room to save up for a holiday - they will want as much of the debt paying back as possible. Any savings you are able to make should be set aside for emergencies.
Your IVA would not be joint but interlocking. A holiday fund would not be allowed unless you could save it from some of your other allowances. You should not have any spare cash once your I&E is worked out. I'm afraid you have to be very frugal whilst doing an IVA/DMP.
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
Some IPs are, unjustifiably, 'snotty' about savings, but most see it as encouraging a good fiscal habit. In theory, you should have nothing to save, apart from the emergency allowance (often a pretty meagre tenner a month), your 'shares' of overtime and extra income, and those expense categories that need to be saved for the 'rainy day' they are destined for (car repairs, dentistry, haircuts, etc.).
If you consistently manage to save £50 out of, say, groceries allowance, the IP might take the view that the agreed expense is too generous and review it. This is where the 'Bank of Mattress' can be your friend!
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014 http://foggy.blogs.iva.co.uk
Ah okay I see, to be honest when we've spoken to advisors our way of living is way below what they recommend for us (we don't drink, don't smoke, don't go out lots etc). So if we lived by their budgeting we'd have nothing left over to save (even after beginning the IVA).
But we're used to a much more frugal way of living already so could we allocate money to grocery, clothes etc but actually put it into savings? I guess if it was taken out to go towards petrol or whatever there's no way to track it anyway x
They will give you allowances for food etc but the main idea is to pay back as much as you can to your creditors and you will need to supply bank statements and payslips every so often depending on your company.
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
