Urgent news on IPA's - Changes for BRs after 01/12/2010

tamarman

Dear All, I went bankrupt on the 08th November and was due to have my ORs interview today, however, it was postponed until the 08th December!
I spoke to one of the Assistants and asked if I would come under the 01st December rules and he said yes!

fermi

To add insult to injury for the new year, the ONS family spending figures shows a drop for 2009/10 figures.

Family spending 'dropped in 2009'

"Family spending fell in 2009 for the first time in 10 years, according to figures from the Office for National Statistics."

Which should be the source for an updated Household Expenditure Spreadsheet at the beginning of next year.

EDIT: I haven't looked properly at the full figures yet. Just saw the headline. Not sure what specific categories might be hit.

fermi

http://www.statistics.gov.uk/pdfdir/fs1110.pdf

Household spending falls for first
time in 10 years

Date: 30 November 2010
Theme: Social and Welfare

UK households spent less on clothing, transport and mortgages last year than in 2008 according to
new figures released today by the Office for National Statistics (ONS).

Family Spending, the annual report from ONS on household expenditure in the UK, found that in
2009 the average weekly household spend was £455.00, compared with £471.00 in 2008. It is the
first drop within the last ten years.

Spending was highest on transport at £58.40 per week though this fell by 8 per cent on the
previous year, with half (£29.30) going towards running costs.

Average expenditure levels in each of the next two top categories were very similar. Recreation
and Culture fell slightly to £57.90 in 2009 from 60.10 in 2008, despite higher spending on items
such as leisure classes, sports admissions, cinemas, theatres and concerts. Expenditure on
housing, fuel and power increased to £57.30 in 2009 from £53.00 in 2008.

Expenditure on Clothing and Footwear was £20.90 per week, slightly lower than the previous year
and continuing the long-term fall in this category to the lowest figures recorded under current
methods. Similarly, expenditure on Household Goods and Services such as furniture and
appliances also hit a long-term low, falling from £30.10 in 2008 to £27.90 in 2009.

Of the £52.20 average weekly spend on food and non-alcoholic drink, almost three-quarters (72
per cent, £37.70 per week) was purchased from large supermarket chains, a similar proportion to
the previous year.

Spending on package holidays fell from £14.70 per week in 2008 to £13.20 in 2009 with £12.30
spent on package holidays abroad, £1.30 less than the previous year.

Giles Horsfield, ONS statistician and editor of the report said:

"This is the first annual decline in average UK household spend since the current method of
recording was introduced in 2001-02, with higher expenditure on some housing related costs such
as rent, electricity and gas offset by lower spending on mortgages."

"Lower spending on diesel and fuel contributed to lower expenditure on transport, but reductions
were also seen on vehicle purchases and public transport."

"It's interesting to note that expenditure fell again on clothing which took it to a record low under
current methods, for the third year in a row. Spending also fell on household goods and package
holidays, but held up on sports admissions, cinema, theatre and concerts."

Overall, average household expenditure in the UK was £461.70 per week for the years 2007-9
combined. There were five regions in which expenditure over this period was higher than the UK
average: expenditure was highest in London (£552.30), followed by the South East (£523.90 per
week) the East (£487.70), Northern Ireland (£485.80) and the South West (£474.10). Spending
was lowest among households in the North East (£387.20), Wales (£396.10), and Yorkshire and
the Humber (£400.70).

London households' high spending was partly due to the housing, fuel and power category (£80.10
per week) compared with the UK national average of £54.00 per week.

Households in rural areas had higher overall expenditure (£500.00 per week) than those in urban
areas (£450.20 per week). This was reflected in expenditure on transport, where spending was
highest (£75.70 in rural areas and £57.00 in urban areas), and recreation and culture (£65.80in
rural areas and £56.40 in urban areas). However, expenditure on the housing, fuel and power
category was slightly higher in urban areas (£54.90 per week) than in rural areas (£52.00 per
week).

WLITC

fermi wrote: »

To add insult to injury for the new year, the ONS family spending figures shows a drop for 2009/10 figures.

Family spending 'dropped in 2009'

"Family spending fell in 2009 for the first time in 10 years, according to figures from the Office for National Statistics."

Which should be the source for an updated Household Expenditure Spreadsheet at the beginning of next year.

EDIT: I haven't looked properly at the full figures yet. Just saw the headline. Not sure what specific categories might be hit.

What an absolute joke. Food prices (and other costs) have all sky rocketed with inflation and yet again, the IS are going to use these already vastly outdated figured to be the guidelines to assess BR's.

I can why, understand normal financial circumstances (in a stable financial market, with little fluctuation) these figures have been used in the past, but the recession created a period of deflation in 2009 and for the 2nd year, these figured are reflective of that period. Given that we now have inflation running at 4.5% (and as high as 5.3% in April) its seems crazy and grossly unfair that figures from a period of deflation are being used as the guidelines during a period of hyper inflation.

BTW, if anyone can decipher the figures, here is the actual data that Fermi's article refered too. http://www.statistics.gov.uk/downloads/theme_social/family-spending-2009/familyspending2010.pdf

the_bright_side

Speaking to my insolvency practitioner today who is also a MoJ advisor, he seems to think that taking 100% is unworkable;

A: As it breaches human rights and that one test case will stop this.
B: Most OR just wouldn’t enforce it (as its easier to allow a BR to have surplus that he / she could use in emergencies rather than contact the OR or Moonbeaver every time there is an IPA payment issue due to none payment = additional admin overheads

but most importantly

The whole point of bankruptcy is to allow the BR a fresh start and to be able to manage their money, with a positive outlook for the future, which this totally goes against

Also how many people will now manipulate their IPA to allow a surplus, just in case, where previously there was no need?????

fermi

welshladinthecity wrote: »

BTW, if anyone can decipher the figures, here is the actual data that Fermi's article refered too. http://www.statistics.gov.uk/downloads/theme_social/family-spending-2009/familyspending2010.pdf

ONS summary is in my previous post.

If you want to read the full survey, then be warned! :cool:

WLITC

fermi wrote: »

ONS summary is in my previous post.

If you want to read the full survey, then be warned! :cool:

Sorry it took me so long to post, people including yourself had responsed areadly. Still hard to make sense in comparision to the data on the excel sheet issued to the OR's as guidance. I'm just thankful that I went BR months ago.

fermi

It is very hard to reconcile one with the other.

One is arguably over simplified, while the other is just 'data overload'.

Hopefully it will be a case of decreases in some areas being offset for most people by increases in others?

That was what happened (more or less) with the MAT/BBA trigger figures the last few years.

Son1c

<i>From 1st December 2010 the IS are to take IPA payments of £20 per month (current lower limit £50) and that ALL SURPLUS WILL BE TAKEN, not 50 - 70 %</i>

When you say that the IS are to take IPA payments of £20 per month, do you mean that all surplus income above £20 will be taken? ie, if you have £100 per month disposable income, you would have to pay £80? If this is implemented it will cause serious problems for Bankrupts and will probably backfire. Dont forget that an IPA is an <i>agreement</i> to pay a percentage of the bankrupts disposable income. If an agreement cannot be made then the trustee would have to apply to the court for an IPO. Such applications are not cut and dried and Judges can (and do) refuse to make them if it appears that the bankrupt would be put into hardship.

The whole point of taking a percentage of disposable income (as was in the original directions) is to enable the bankrupt to remain solvent now and in the future. If all of their disposbale income is to be taken from them, it is going to force banrupts into the hands of the loan shark. I wonder which mastermind came up with this one to justify their existence?

Cheers - Col

JCS1

If your surplus is £20 or under then it's not taken (I'm assuming the collection costs from Moonbeever, etc, mean it's not worth doing).

If you have a surplus of over £20, then the whole of the surplus is taken. So £100 surplus means £100 IPA.