Fluctuating income / rent deposit

lilybankrupt

Just wondering if anyone could advise how the OR would calculate an IPA if your income is variable. In my case I am self employed selling personalised gifts which means Christmas can be huge but Jan and Feb especially are pretty rubbish. So I might make several thousand a month in November and December but nothing in Jan and Feb for example.

Following on from this, I am possibly looking at declaring BR before repossession takes place, which I am hoping to 'drag out' till early next year. I was hoping that if I have a really good Christmas I can use the funds as follows:

- put aside the equivalent of the 'allowed expenses' for the upcoming lean months where income is nil or very low
- flat deposit (BR on credit file means at least a few months rent up front I imagine, probably six months)
- possibly replacing any business equipment (I engrave stuff using an engraving machine and PC), only if necessary obviously

How does the OR view all of these?!

adpod

lilybankrupt wrote: »

Just wondering if anyone could advise how the OR would calculate an IPA if your income is variable. In my case I am self employed selling personalised gifts which means Christmas can be huge but Jan and Feb especially are pretty rubbish. So I might make several thousand a month in November and December but nothing in Jan and Feb for example.

Following on from this, I am possibly looking at declaring BR before repossession takes place, which I am hoping to 'drag out' till early next year. I was hoping that if I have a really good Christmas I can use the funds as follows:

- put aside the equivalent of the 'allowed expenses' for the upcoming lean months where income is nil or very low
- flat deposit (BR on credit file means at least a few months rent up front I imagine, probably six months)
- possibly replacing any business equipment (I engrave stuff using an engraving machine and PC), only if necessary obviously

How does the OR view all of these?!

I am in a very similar situation, I can earn £3-£4k a month for 3-4 months straight then only earn £200 for the next 3-4 months. I have my OR interview tomorrow so Ill let you know what he says about my income.

alastairq

The OR will calculate an average.

Just to remind folk, much of what goes on with regards to the OR in a BR is subject to negotiation.!

Therefore, if, for example, one's income fluctuates, and one can present a sound argument for preserving a certain amount, to set-aside.....then this should be put to the OR.

Whilst the OR has a duty to realise assets for a BR, they also have a duty to ensure the BR doesn't suffer undue 'hardship' as a result.

So.....if you don't like what the OR proposes, put a good argument together and present your own views.

arcon5

Your equipment should show up on your accounts as depreciation.... this value would effectively accumulate in cash but reflect your profit and loss account. The receiver will see this when they assess your accounts.

lilybankrupt

adpod wrote: »

I am in a very similar situation, I can earn £3-£4k a month for 3-4 months straight then only earn £200 for the next 3-4 months. I have my OR interview tomorrow so Ill let you know what he says about my income.

That would be great if you could update me / everyone!

lilybankrupt

Thanks everyone, and the reminder that it's a negotiation is a good one! I think i've been expecting to go in shame faced and accept whatever the OR says! Obviously I don't want to upset him / her and I know I need to be realistic / reasonable, but knowing what I want to achieve and having a thought out proposal would be a good thing

arcon5

I found the OR very reasonable indeed. It's likely they will seek an average take home pay from you then accounts every 3 months. When submitting your accounts you could also add a footnote with the end year depreciation value to be added. Possibly also submit amended projections with the rest of the tax year also.