SOA vs reality

LincsPaul · 18 May 2017 at 2:31PM

There are a lot of threads about SOAs and maximising allowances to reduce IPAs etc. What I've read here and also on debtcamel (https://debtcamel.co.uk/tell-official-receiver) is that once the income and expenditure is agreed, what you do with your money is your business. But is this true?

Scenario 1: You have a £60 per week budget for groceries and toiletries and £15 for public transport. Most weeks you only spend £40 in the supermarket and don't use the bus. Over a year that's an additional £1300 sitting in your bank account. Will the OR notice? Can it be taken? Should you withdraw it bit by bit to avoid any issue?

I suppose it's a similar situation for those people on here who live with their parents and are advised to enter £400 a month room rent even if they are only being charged half that. What should they do with the unused money? Is it claimable?

Scenario 2: As per scenario 1, there is money unused in your account each week. You spend this on a summer holiday or in the Dog and Duck. These transactions appear on your bank statement as you used your debit card. Problem?

I've read that it's wise to underspend from your SOA in order to build up an emergency fund. But at what point will the OR think you are being dishonest and want to claim the cash?

Mollie_Guinness15 · 18 May 2017 at 4:06PM

I've been wondering just this too

TheGardener · 18 May 2017 at 6:12PM

To my knowledge, once an IPA has been set - only changes to your income are notifiable to the OR. In reality, most people HAVE to do make savings within their budget in order to pay for things not included in their SOA like a family birthday present etc or a meal out with friends. The Holiday allowance is so small, noone would really be able to afford a holiday on that alone would they. I haven't heard of anyone on here who's OR checked their bank statements after the budget was set (unless there are BRO's in place) and then claimed the 'savings' as an asset.

If you are able to save that money, and you are concerned, then simply keep it somewhere less visible.

LincsPaul · 18 May 2017 at 6:39PM

TheGardener wrote: »

To my knowledge, once an IPA has been set - only changes to your income are notifiable to the OR. In reality, most people HAVE to do make savings within their budget in order to pay for things not included in their SOA like a family birthday present etc or a meal out with friends. The Holiday allowance is so small, noone would really be able to afford a holiday on that alone would they. I haven't heard of anyone on here who's OR checked their bank statements after the budget was set (unless there are BRO's in place) and then claimed the 'savings' as an asset.

If you are able to save that money, and you are concerned, then simply keep it somewhere less visible.

Thanks. I guess it's quite possible, although a bit of a faff, to withdraw money periodically in order to make the bank account seem 'less full'. PROVIDING the money is already earmarked to go towards food etc.

I'm still wondering what the chances are of the OR asking for bank statements (or having a peek themselves if it's a pre-BR account) and getting upset when they see a Ryanair flight or something in there!

kimplus8 · 18 May 2017 at 8:43PM

You are allowed to build up an 'emergency fund' so keep it back for that and once you are discharged if you want to put that towards a holiday then I suppose you can, I think once your budget is set and the OR is happy then your money is yours to do with as you please, and as long as you are not touting around in a Ferrari and go under the radar then you will be fine from what I have read on here.

LincsPaul · 19 May 2017 at 12:00AM

kimplus8 wrote: »

You are allowed to build up an 'emergency fund' so keep it back for that and once you are discharged if you want to put that towards a holiday then I suppose you can, I think once your budget is set and the OR is happy then your money is yours to do with as you please, and as long as you are not touting around in a Ferrari and go under the radar then you will be fine from what I have read on here.

Thank you. No Ferrari so far (wink wink) but I'd be delighted to know from anybody who has gone through the experience recently whether the OR peeks at our accounts to check whether x amount has indeed been spent on what is was supposed to or not, and whether any 'build up' of cash is taken.

Steven_from_scotland · 19 May 2017 at 5:13PM

I went bankrupt through a company, there was some positive equity in my home and I still managed to keep that but agreeing that a relative would pay a monthly sum for my 36months IPA period that covered the equity, I have had my review period every 6 months where I have to provide both 6months of bank statements and wage slips, I have been on holiday and booked flights with my card and they didn't mention anything, I'm at 26months stage so only 10months worth of payments to go and 1 last period of handing in wage/bank slips, as long as they are getting their fees they don't seem to be too bothered what I'm spending my money on

LincsPaul · 20 May 2017 at 5:49PM

Steven_from_scotland wrote: »

I went bankrupt through a company, there was some positive equity in my home and I still managed to keep that but agreeing that a relative would pay a monthly sum for my 36months IPA period that covered the equity, I have had my review period every 6 months where I have to provide both 6months of bank statements and wage slips, I have been on holiday and booked flights with my card and they didn't mention anything, I'm at 26months stage so only 10months worth of payments to go and 1 last period of handing in wage/bank slips, as long as they are getting their fees they don't seem to be too bothered what I'm spending my money on

Great. At what point did they ask you to send statements in? I am currently unemployed so they haven't asked for anything but I am wondering if they will start once I get another job.

Interesting that they ask for bank statements when technically they have the power to look for themselves. What's to stop you having two accounts?! (Not advising dishonesty here!).

I guess that is what I was worried about - money building up to a few hundred through groceries savings etc and them swiping it away just before discharge.

skylineboy2002 · 25 May 2017 at 6:28PM

you could always get a pre paid debit card..

take cash out of you bank, then "load" this pre paid card up at various shops / post offices etc, like paypoint i think, and then you have a debit card which has ONLY the balance you loaded up.

EG, £50 out of bank account in cash, from ATM.

go to whereever to load up the pre paid card

then you can use this card online or in shops like any chip pin card to pay for stuff, and yes they may charge 50p-£1 for this, but the money doesnt appear to have come from your main account, as its cash out that will show on your main bank account statement, not where its gone to!

elljay · 26 May 2017 at 1:57PM

My IPA runs out soon and I've had several reviews during the period as my income has gone up and down. Although I've done a revised IPOQ each time I've never been asked for bank statements.

I've always felt my IPA was generous (£50 per week for one person for groceries etc) so as I spend about half of that I built up quite reasonable savings in a Credit Union account and a Co-op online saver.These I've used for larger household repairs, new car engine(would never have been able to afford that pre-bankruptcy) a few holidays etc. No Ferraris but it's been nice to be able to pay for these bigger things without worrying.

I think one of the main things that reading this forum has taught me is that there are huge inconsistencies between OR offices and what works for one person can be different for someone else.

EJ

Mollie_Guinness15 · 26 May 2017 at 2:51PM

The new IPOQ asks if you put away savings regularly and how much. In fact the new one is much lengthier and more detailed than the old one.

SOA vs reality

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