I'm a bit confused by what we have been told to do with our car payments.

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adam355
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by adam355 » Thu Jul 27, 2017 4:56 pm
We are almost certainly going into an IVA and are talking to Stepchange IVA. I'm a bit confused by what we have been told to do with our car payments. There are two vehicles on HP, my payment is £159 per month and my wifes is £342 per month. Stepchange have advised that my wifes is too high and needs to be £250 or under. When I asked if we could leave my wifes payment the same and reduce mine by the same amount (to £80 per month) I was told no. Seems a bit odd to me - either way it would release the same amount of £ to the IVA payment??
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Foggy
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by Foggy » Thu Jul 27, 2017 5:29 pm
You can still do this in actual cash terms in your bank accounts --- but has to be shown on paper as the creditors wish it -- at the end of the day the figure that concerns you is the amount you actually pay over each month to your IP, how that is made up in the distribution of expenses / allowances is immaterial.
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adam355
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by adam355 » Thu Jul 27, 2017 9:01 pm
Thanks for the reply.

So taking that a step further then.

Could I keep my two car payments as they are and offset the fact that my wifes payments are £90 above an acceptable level by reducing my expenses elsewhere?

For example - My Budget sheet would look like this:
Car 1: £341
Car 2: £159
Broadband/telephone package £20
Clothes/shoes £60

Total £580

and the budget I submit to my creditors via the IVA guys would look like:
Car 1 £241
Car 2 £159
Broadband package £60
Clothes/shoes £120

Total £580

These aren't my actual numbers by the way - its just an example but it demonstrates that I could make exactly the same IVA payment. Have I got that right?

If so then wont someone check that my outgoings are exactly what I tell the IVA guys? I mean the totals will be the same but they will be allocated differently to those numbers on the budget that my IVA guy takes to my creditors. That wont be a problem? I guess I am just unsure of the process.
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Foggy
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by Foggy » Thu Jul 27, 2017 9:11 pm
As long as the figures are within the guideline amounts they are unlikely to be queried. To be frank, many IP's will manipulate figures in this way as long as the end result is within guidelines and reflects an accurate spend. In your example my BB/ sky allowance was £60, so I guess you could get away with that -- but £120 on clothes / shoes might be a tad optimistic --- better to add a tenner here and a fiver there to other expenses --- which would be more likely to keep each one withing guideline figures too ---- don't forget to claim for newspapers (mine was £5), haircuts (again mine and the then wife's was £30), small contingency fund (mine was £20). Some even get a seperate allowance for smoking !
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adam355
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by adam355 » Thu Jul 27, 2017 9:23 pm
Again, thank you.

If an expense is queried by the creditors is it just a case of me 'rejigging' things?

Also - at no point am I required to provide proof that my outgoings are exactly the same as on my IVA budget?
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Foggy
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by Foggy » Fri Jul 28, 2017 9:17 am
adam355 wrote:
Again, thank you.

If an expense is queried by the creditors is it just a case of me 'rejigging' things?

Also - at no point am I required to provide proof that my outgoings are exactly the same as on my IVA budget?


You will be required to prove any expenses outside the guidelines, which may, or may not, be agreed by the creditors. IP's will also need things like utilities, council tax, mortgage, car insurance verified. This will be repeated on an annual basis (the depth into which they go depending upon the dilligence of your chosen IP). I don't think outgoings ever exactly match the budget ---- they won't scrutinise your shopping bills, for instance. If you have an agreed allowance of, say, £450 and you spend £400 they aren't going to notice. £20 quid (or whatever) a month for haircuts ??? --- they won't be round checking your quiff .... or wanting to see the "dead" newspapers to prove you spent that fiver in Smiths.

My IP was quite "fluid", others maybe not so much.
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Michael Peoples
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by Michael Peoples » Fri Jul 28, 2017 9:23 am
You could consider a second opinion from a different firm. It would not be easy to change HP agreements and while some creditors do feel that HP over £250 is excessive there are alternatives. For example some creditors ask for an extension to the IVA of a few months to address the extra costs and our clients are normally happy with this. Cutting other expenditure would make the IVA difficult but an short extension could make things so much easier so another firm may be able to help.
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Foggy
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by Foggy » Fri Jul 28, 2017 9:28 am
Good advice from Michael -- getting the initial budget right is crucial. They could well of changed by now, but, when I first started researching IVA's, Stepchange (by their previous name) left off a lot of categories I should have been claiming as expenditure to increase the disposable element.
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