Conflicting BR advice from CCCS & CAB

Costus · 20 October 2008 at 2:26AM

Just wondering if any of you guys can help us out with some advice on going or maybe not going BR.
I took all of your previous advice on contacting the CAB & CCCS and we've been to CAB and they recommended we went BR, had a really long phone conversation with the CCCS and the advisor said that we had too much surplus per month, this was after he knocked down what we thought were reasonable amounts for day to day living, he didn't agree with some of these expenses, but we got a lot of the expenses off various different posts on this site that some of you guys suggested were fair amounts for people with the same size family as us, 2 adults & 1 child. (I really think that you guys have the best idea on what amounts are adequate or allowed in a BR.) In the end the CCCS recommended either a 5 year IVA or a DMP that would last 10 odd years, and BR really as a last option, but highly unadvisable !

Now we are really confused.

Our situation is, we owe £45,000 of unsecured debt. We have no assets whatsoever, 2 cars, value £500 & £1500 approx. Live in a rental property. I am 34 work full time, OH is 33 and works part time at the moment but will be giving up work in the next couple of years, due to child care issues as we are trying for our second child.

So with this in mind we are thinking why pay into a DMP if 2 years time we won't be able to afford the DMP and will have to consider BR then anyway, or have the possibilitiy of being mis sold an IVA and not being able to complete that also?

I will put up our monthly SOA of what we thought was reasonable, some of which they agreed with us and some they didn't and also what the CCCS thought was reasonable.

Your help and advice would be really appreciated as i would be more inclined to go on your advice as you have been there and done it.

Income
me £1693
oh £501
Child tax credit £44
Child benefit £81 we thought CB didn't get included, CCCS said it did ?

Total income
£2238 without CB, we went on this amount.
£2319 with CB, CCCS went on this amount.

Expenses
Rent £550
water £50
Gas £70
Electric £70
Council tax £107
Contents insurance £11, low but correct.
Telephone £60
TV Licence £12
Child care (playschool) £20
Car tax & MOT £43
Car insurance £48
Car spares & servicing £40, CCCS £30
Vehicle fuel £261 a lot i know, but it is justified.
Car breakdown cover £12
Car parking charges £18 CCCS didn't even include this in their SOA for us, don't know why, probably an oversight on their behalf. :rolleyes:
Housekeeping £450 CCCS £392
Meals at work £40
Clothing £130 CCCS £56
Hairdressing £25 CCCS £20
Laundry/dry cleaning £10
Prescritions £14
Dentist/ Opticians £16 CCCS £10
Holiday fund £60 CCCS called it sports, hobbies, entertainment £32
Emergencies £25
Gifts £15 CCCS £0
Also CCCS suggested £17 newspapers, we said o.k. then. Then they knocked it down to £10.... bizarre!

But i won't include these as i know newspapers aren't allowed in BR.

Total
£2157 CCCS £1943

Surplus
£81 (haven't inc CB) CCCS £376 (have inc CB)

The reason i'm going on a bit about Child benefit is i am sure that its not included in any BR, but the CCCS were positive i was to include it as income, i think he was looking at it from a DMP and me from a BR point of view, theres a big difference !

Sorry this is a bit of a long post and i'm really grateful you have took the time to read it, any help and advice please folks.
Many thanks in advance.

dickoa · 20 October 2008 at 2:43AM

From what i can remember from previous posts and dont quote me on this is

Child benefit is included in your SOA but is not included in the calulation for an IPA (However the OR may reduce other costs taking into account CB for example if your clothing costs were £150 thats £50 each he may say the childs clothing costs will come form CB and reduce it to £100.)

Child tax credit on the other hand is included in both

Im pretty sure thats the correct way round

On what you have said in your post £45000 is alot of money even if you were to be earning alot. It would still take along time to pay off. My advice is only based on what i know and what i would do. But if your thinking of having more children then you dont want a debt hanging over you for the next ten years. On the same note you dont want one for the next five years. I would go BR if you dont mind the side effects i.e. name in the paper no credit etc. Worst case seaniro with BR you pay an IPA you can afford for the next three years and your all done. Which given your partner and yourself are trying for another child your income will drop and your expenses will rise, your IPA will probably be dissolved.

I wish you the best of luck and hope this helps someone else will probably drop and correct what ive got wrong

"TIME WAITS FOR NO ONE ITS FOOLISH TO FEAR WHAT YOU CANNOT AVOID"

Costus · 20 October 2008 at 3:15AM

Thanks for the quick reply dickoa, its nice to know i'm not the only night owl. lol.
That does seem to make sense with the child benefit.
With regards to our debt thats exactly the way we were thinking, just get it over and done with. Our name in the papers isn't a problem, a small price for some sanity !
We can't get ( and don't want ) any more credit (or debt ), its cash only from now on.
A bit worried about an IPA though, but as you say it would be dissolved once our income drops.
Thanks again for your advice.

blind-as-a-bat_2 · 20 October 2008 at 3:25AM

firstly if you have nothing to protect assett or job wise then an IVA is not the correct advice for you, on that point i will say CCCs where wrong

If a DMP will take 10 years or more then, while some will say its doable, it is a point where BR is a viable option so again i would say the CCCs advice, while not exactly wrong was not as balanced as it should have been.

Now for your budget, you are confusing a BR SOA and a normal SOA that would be used to maximise your surplus by cutting everything to the bone, so you could repay your debt via a DMP, which is fine if you are able to do it, but its not that simple just to do a DMP.

In a DMP you have no legal protection from your creditors, as they dont have to agree to the amount CCCS offer, even if they do they can pull out any time and hound you to increase the payment

Basicaly you will be faceing 10 years plus, living on a minimum budget, with little or no spare money to put by for unforseen expenses, let alone any form of fun in your life.

A BR SOA however is more realistic, and factors in some leeway for those unforseen expenses

You have to bear in mind most household electronic items and domestic appliences only have up to a five year design life span these days (on average) so in the space of that ten years you will be looking at having to replace your washer, fridge/freezer dryer etc at least once, thats not even taking into account the extra expence the car will entail as it ages thru those ten years.

So unless that can be factored into your DMP your not going to make it to the end before you struggle or fail due to unforseen expense you have not been able to put anything away for because your budget was too tight to start with

That is why BR is more suitable if your DMP will last longer than 5, or 7 at the very most, years.

I know some on the DFW board will probebly disagree here, but thats a practical view of it, not a moral one.

I will always agree BR should be a last resort, but you also need to be realistic as to when you have reached that point

As for child benefit it is counted as income, and must be declared on your BR SOA BUT it is disregarded when the OR calculates the surplus to decide if a IPA is to be applied.

so even though you declare it it is not, (or should not as sometimes they 'forget' to take it of) , be counted, but that is what leads to the confusion i think

dickoa · 20 October 2008 at 3:36AM

Im on the Dreaded night shifts!! As for the IPA you are as i see it in a good position if you do get and IPA you will know what has been allowed and what not So there for when your partner does come out of work and wages are reduced your SOA will have already been approved. Meaning that the OR couldnt reduce any of the things listed. I may be wrong though so dont take it as fact. On the same note dont really know your current rental status can the house accomodate the three or you plus a new baby. If not you may have to move to a bigger house (higher rent plus higher bills) this would enable you to submit a new SOA with higher costs less likely to have an IPA. Just food for thought!! As for the paper thing, Life is what you make, the way i look at it is you need to do the best for "your family" "your unit" and if that is going BR and having your name in paper who gives a s**t do what needs to be done.

"TIME WAITS FOR NO ONE ITS FOOLISH TO FEAR WHAT YOU CANNOT AVOID"

blind-as-a-bat_2 · 20 October 2008 at 3:39AM

dickoa wrote: »

Child benefit is included in your SOA but is not included in the calulation for an IPA (However the OR may reduce other costs taking into account CB for example if your clothing costs were £150 thats £50 each he may say the childs clothing costs will come form CB and reduce it to £100.)

]

No the OR cant factor CB at all, they cannot reduce anything because of it, this was decided in the high court.

Im not saying some OR,s may not try to do as you have said, but its not allowed

Costus · 20 October 2008 at 4:14AM

Thanks for getting back so quickly BAAB.

It seemed like the CCCS were really trying to push us towards a DMP, even though i told him that we had already tried a DMP with Payplan and couldn't keep up with the payments due to the fact that my oh had to go from full time to part time due to child care issues, and also that the CAB had recommended BR to us due to our low surplus.
I must admit replacing the electrical applicances and replacing cars etc have been playing on my mind, if we were to enter into a DMP or an IVA, but it looks like neither of them is suitable for us, deep down i think i know that BR is our only viable option in the long term.
What did you think to our expenses ?
Do you think we are over estimating things ?
Its hard to know excatly what we spend on things like clothing per month, ie if the little 'un needs some new shoes, and if we have the money we buy them, if not we wait until we have a bit of spare cash in a couple of weeks and buy them then.

Also things like emergencies, meals at work, gifts, are these things taken into consideration during BR?

Costus · 20 October 2008 at 4:34AM

Thats a good point dickoa regards if i do get an IPA, and also we may have to move as we are currently in a 2 bedroom house, so our rent will almost definately go up in the next few years if/when we outgrow this house.

I must admit things are a struggle and the worry debt brings isn't a nice experience.

But at least if we do go BR, even though it wouldn't be easy, i think of things in the long term, and like you say i must do what is best for us as a family unit.

Talking about these things, as strange as it sounds, seems to lift a bit of the worry and stress.
Thanks.

Hanging_bythe_fingernails · 20 October 2008 at 5:31AM

Costus I am in a similar situation to you financialy and had the same sort of advice from CCCS. I have come to the same conclusion that BR is the only route and have booked BR appointment although it does play on my mind that I was advised DMP / IVA by CCCS, as they say you need to do what's best for you.

Costus · 20 October 2008 at 6:07AM

Thanks HBTF for letting me know about your similar CCCS experience, i came off the phone feeling really frustrated, as only the day before i was told by the CAB that BR was our only route out of this situation.

I know a lot of good things are said about the CCCS but with my experience i felt that i wasn't being listened to properly, and that the advisor was really trying to steer me down the DMP route, even though i told him that i wouldn't be able to complete the term of 10 plus years in a DMP, with all our future plans.

But hey, i suppose there are plenty of people on here that they have helped sort their debt problems, so they must get it right most of the time.

Just not with me & you.

Good luck with your BR, and thanks again for your input.

Costus · 21 October 2008 at 5:31AM

Can anyone help me with my SOA amounts please ?
I'm not sure if i'm claiming too much or too little for BR.

Conflicting BR advice from CCCS & CAB

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