Oh look...another BR question, he he!

31.7.22 Mobile phone costs

Costs must be reasonable. It may be necessary to disallow part of the monthly amount claimed if the claim is above average and the calls made can be shown to be predominantly social. Where the bankrupt uses the mobile phone for business calls, the official receiver should establish whether the bankrupt's employer provides re-imbursement for this usage (or if self-employed, whether the bankrupt claims expenses for this usage from the business additional to any other drawings/income they have already declared) , and either include the re-imbursement as additional income to off-set against the total expenditure claimed, or simply disallow the work-related portion of the claim for mobile phone usage (the same principle could also be applied where a bankrupt uses their landline home telephone for business as well as personal calls). Where the bankrupt claims that use of a mobile phone is essential, but costs claimed have been reduced or disallowed by the official receiver/trustee in the IPA/IPO calculation, it is up to the bankrupt to consider whether a "pay as you go" scheme would provide a cheaper alternative to their existing arrangement. Where the bankrupt is still in receipt of ongoing services under contract at the date of bankruptcy, the official receiver/trustee should give notice to the mobile phone service provider that he/she does not wish to adopt the contract previously held by the bankrupt. Where a penalty is incurred arising from early termination of the contract this should be included as a debt in the bankruptcy proceedings. (See alsoparagraph 31.7.35)

31.7.19 Expenditure items which can be allowed

The following provides a general list of expenditure items which can be included in addition to basic domestic expenditure when making an IPA/IPO calculation to establish whether the bankrupt has surplus income:

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• TV licence
• Household and car insurance
• Car tax
• AA/RAC or similar motoring assistance club membership
• Membership of professional body required in order to carry out employment (unless paid by employer)
• Hire of TV and/or DVD/video player (no more than one of each appliance per household)
• Prescription charges - see paragraph 31.7.20
• Dental and optical treatment - see paragraph31.7.21
• Mobile phone costs - see paragraph 31.7.22
• Dry cleaning costs - see paragraph 31.7.23

31.7.24 Other expenditure items to be considered

Outgoings assessed must be realistic and should cover the actual expenditure required to provide for the reasonable domestic needs of the bankrupt and his/her family. It may be necessary when examining the figures provided by the bankrupt to consider other areas of expenditure which the bankrupt may not have included, but which are necessary for meeting their reasonable domestic needs. Some bankrupts may find it difficult to assess the outgoings of themselves/and or their family where the expenditure is sporadic (e.g. buying school uniforms) or prior to bankruptcy they have not been in a position to meet their reasonable domestic needs as a result of other pressing debt repayments.
In these circumstances it may be necessary for the official receiver/trustee to refer to average expenditures in order to calculate the realistic outgoings required to meet the reasonable domestic needs of the bankrupt and his/her family.
The following suggested areas cover other types/amounts of expenditure claimed by the bankrupt which may need careful consideration when making an IPA/IPO assessment.

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• Clothing - see paragraph 31.7.25
• Holidays - see paragraph 31.7.26
• Hairdressers - see paragraph 31.7.27
• Extra curricular activities for children - see paragraph 31.7.28
• After school clubs - see paragraph 31.7.29
• Pets- see paragraph 31.7.30
• Rent arrears - see paragraph 31.7.31
• Maintenance payments - see paragraph 31.7.32