SOA Advice Needed please

tigerfeet2006

Dear MoneySavers....

This is a difficult board - many think bankruptcy too easy - and I dare say in some cases it is. Yet others have been through hell, seen family and home torn apart, and its a welcome and deserved release.

I didn't set up MSE to be personally judgemental, but to help people whatever their circumstances. If you have problems with the Bankruptcy laws then the 'Discussion Time' forum is the appropriate place.

This is to help people who are bankrupt rehabilitate their finances - and I personally wish them all the best - whatever their circumstances.

Many people who have gone bankrupt, have had serious debts, have hidden them for a time, been scared to confront them, suffered depression or have even had suicidal thoughts because of them.

So may I caution MoneySavers to err on the side of kindness. The fact bankrupts are here means they're looking for help, guidance and to take charge of their finances - and that in itself is admirable

Please use your knowledge and kindness to help rather than to berate.

If you feel it’s important to point something out that the poster may find negative but needs to understand, then it's not a problem, but do think carefully about your phrasing - people can be very sensitive and nuances may mislead when it’s in an online Forum.

Martin

happybucket

I think it would be quite easy for two people to spend £500 at least a month if they shopped in the small supermarket that's local to me, charges are 2.5-3 x that of the big stores!

Smokey_Joe

minic wrote: »

Hi Smokey Joe,

If you and your wife's only income is from state benefits then you will not get an IPA so the figures on your SOA won't be looked at by the OR.

M

Thank you for that information, I wasn't aware that the SOA was irrelevant when on benefits. I thought I had read somewhere that an IPA or IPO could be insisted upon by the OR even when the only income is benefits.

minic wrote: »

Hi Smokey Joe,

I'm assuming that your query relates to the allowances to be agreed with the OR when determining whether an IPA is payable or not? If you are looking for advice on cutting your costs I'm sure others will be able to advise on that but as I say if your only income is benefits no IPA will be set up unless you gain employment prior to discharge.

Best of luck

M

Thank you. I was looking for advice on the figures in terms of their acceptability to the OR as there is always a remote possibility that I could gain employment before discharge, no matter how unlikely it might be that an employer would employ me over a non-disabled person. Even if I were ever able to get paid employment, which as I said is unlikely, we'd need to employ a carer for my wife for when I was working.

In response to the many other comments in this thread I'll say thanks for the many and varied comments. The thread certainly makes interesting reading.

To expand on some of the questions asked I'll add the following information.

Our benefit income is made up of 2 lots of DLA, Carer's Allowance, Severe Disability Allowance, Income Support, Housing Benefit & Council Tax Benefit. Converting the weekly rates gives the following monthly figures:
Disability Benefits total £1268pcm, Income Support is £207pcm, HB is £291pcm & CTB is £86pcm. This is how I arrived at £1852pcm Benefit Income.

The SOA includes all benefits stated above. Car expenses are shown as Motabilty Payment under Other Travel with the diesel shown separately, hence no Insurance, MOT/Maintenance, Car Tax, etc.

The Rent & Council Tax amounts are shown on both sides of the SOA. Gas & Electric look to be about £22pcm short in the above figures having just had my latest direct debit forecast. Water isn't metered (if it were it'd cost us about £35 pcm more). Home Phone & Internet are with BT, Mobile Phones with Orange. Satellite covers Sky's basic package (and yes it is now that much per month). Medical covers glasses for both myself and the wife and the pet insurance/vet bills is for 2 dogs and 2 snakes. Presents covers 2 parents, 2 sons, 1 young Nephew & 1 young Niece, as well as ourselves. Haircuts covers the wife only, she shaves mine (with a £20 set of clippers we bought about 10 years ago - one of the best bargains we've ever had). Entertainments is for the odd day out or occasionally a meal out. The holiday covers the cost of a fortnight's camping plus kenneling for the dogs. The Emergency Fund does what it says on the tin.

As for the Shopping budget, I'll say this. The amount we entered here is what was left from our income after the above expenses have been taken off - and it does NOT include window cleaning. The reason I did that is that there are some categories of spending (some of which is one-off expenditure and some is regular budgetable expenditure) which we have had recently and are upcoming that are not included in the SOA. In there is not just food, but also pet food, cleaning materials, laundry, etc. There are also things like fixing the 5 year old cooker (which has been broken a fortnight so far - tripping all the electric's every time it's wired up), attending my mother's funeral recently (hence the delay in responding to the many responses in the thread), removal expenses from the NW of England to the SW as soon as we can find somewhere to rent, redecoration costs (to both the old and new rented properties), a replacement for our 15 year old mattress, and so on. Any and all of these things currently have to come out of our "Shopping" budget as we have no emergency fund at present - and looking at that list nor will we for some considerable time - especially at £20pcm "Emergency Buget"!

The removal costs and redecoration expenses are going to arise as a result of the new "bedroom tax". When we moved here (from Scotland) a bit over 5 years ago we had 2 teenagers and were offered a 3 bed house. The move itself cost a fortune (a gas leak meant living between two houses separated by 150 miles for about 6 weeks). We took the house thinking the kids would be with us while they went through Uni and so we spent some money making the place comfortable, buying furniture which would last, decorating the place and such like. We signed up to the house for life thinking we'd be here until we maybe had to move into the nursing home in about 35-40 years.

The debts represent our accumulated debt over the last 25 years or so, which when you put it into context means we've been on average overspending by about £40 per week. Yes that sounds a lot, but in the last ten years alone we've had 3 houses and we're now going to have to move AGAIN (exasperated sigh). In that time we also got married, had to replace ALL our white goods, most of our furniture and buy window coverings and carpets for 3 houses (so far). We owned and ran a total of 4 private cars (one at a time) before switching to motability and my wife learned to drive. That list is just what I can think of from the top of my head.

I'm bipolar which means when I became unwell at various points I tended to overspend, a common issue with bipolar disorder. I also have IBS. My wife has chronic arthritis, incontinence, PTSD and depression.

My wife is, in spite of her problems, my main carer and gets Carer's Allowance as a result. I'm an unpaid full time carer for my wife. Basically I make sure she doesn't break anything when she crashes to the floor and she makes sure I don't burn the house down when I'm making the dinner - quite a nice arrangement really :rotfl:
Neither of us asked to be afflicted by our conditions and both of us would dearly like to work but neither of us would reliably be able to hold down a job for very long due to the variability of our conditions. Since we moved here our Mental Health care has been intermittent at best and non-existant at worse. We also had 2 teenagers who were, shall we say, "difficult to handle" and we got palmed off from agency to agency as each agency decided our problems were too complex for them and they didn't know what to do to help us. This is part of the reason they left home far sooner than anticipated.

Now to be absolutely clear here - I'm NOT saying that none of our debts is down to frivolous spending, of course I'm not, I'm merely trying to explain how a hefty percentage of them has built up. Please do bear in mind there's also 25 years worth of all the various bank and credit card charges and interest, the balance transfer fees, the bank loan interest and charges. In the end my wife had 3 credit cards, myself 4 credit cards, I had a bank loan and we had an overdraft. The bank loan, which was for the last house move, car and some debt consolidation, was in retrospect probably the straw that broke the camel's back. Instead of taking the loan over a longer period at lower payments and higher overall cost I tried to keep the costs down by fooling myself into thinking we could manage the larger payments.

To the people who are saying how disgusting it is that we get all those benefits and criticize our spending habits I'll say only two things.

First, we don't set benefit levels (nor do we set wage levels). We have no control over how much benefit we get, other than not claiming benefits the GOVERNMENT says we NEED to live on at the most BASIC level in the SHORT term. We have no significant way of increasing our disposable income as any increase in income we get from anywhere other than benefits is more or less wiped out by benefit deductions (all barring a small weekly amount). Nor do we set wage levels - EMPLOYERS do that - subject to the MINIMUM wage that the GOVERNMENT sets. However those who are working (or are capable of work but out of work) DO have the option of trying to increase their income by getting a better paid job, doing overtime, retraining for a better paid job, etc. People in low paid jobs are often entitled to some benefits income too, notably housing benefit and tax credits (People in jobs can also keep their DLA if they're entitled to it). People in jobs can also sometimes get mortgages and hence are able to acquire EQUITY (or at least they used to be in the days before the credit crunch and negative equity) - an option not open to those who are DEPENDENT on benefits! Nor do we have the option to contribute to a PENSION - hence making us DEPENDENT on benefits in our old age too.

Second, as a computer programmer with 20 years experience (which I would in theory have had were it not for me having to drop out of my degree when my illness was first diagnosed in my very early twenties) I'd likely have been earning somewhere between £30,000 and £40,000 per year by now. My wife could have been earning maybe £15,000 per year if she was working full time as well. Now compare that to our benefit level of £22224 and then tell me benefit levels are too generous. Do bear in mind here that we're each providing full-time care for each other (24/7/365) as opposed to working maybe office hours, Monday to Friday (8/5/240). This means that for 17520 hours of caring per year we get £11,843 - based on the difference in benefits we get now over what we'd get without any disabilities - which works out at about 68p an hour. For 3,840 hours work (if we were both working) we'd likely be earning £45,000 - £55,000, an hourly rate of about £16 in my case an about £8 in my wife's case. The minimum wage is currently set at £6.19 which equates to £11884.80 for a 40 hour week over the year, this means the government has decided that working is worth just under £1500 extra over what we would get on basic income support, housing benefit and council tax benefit. Of course, I'm not sure if any of that benefit, such as housing benefit or council tax benefit, would still be payable on minimum wage and nor am I sure whether Working Tax Credit might be payable. I repeat - now tell me benefit levels are too generous. From the figures above it can be inferred that the government sees about £11,000 - £12,000 per year as the minimum amount they expect a couple with no disabilities to survive on - whether they're working or not. From that perspective I can understand why people with low wages resent having the same income as a couple who're not working - but I would argue that the minimum wage level should be increased as opposed to benefit levels being cut.

We've just had a £22.41pw benefit cut - that's how much rent we now have to find from our income to cover the bedroom tax - in spite of the fact that an OT has said we need a two bedroom ground floor flat or bungalow (we often have to sleep apart due to our conditions) we've been assessed for housing benefit under the new rules as having two spare bedrooms instead of just one. That's despite housing associations accepting our need for two bedrooms and allowing us to bid for two bedroom properties. Even when we move to a two bedroom we'll still be subject to the charge on the second bedroom under the current rules.

Anyway, if anyone's made it this far then well done. :T

I'll finish by saying thanks in particular to HappyMJ, minic, debt doctor, exarmydreamer, rossireps, sort_me_own_yard_out, luvchocolate and happybucket. A special thank you to tigerfeet2006 for jumping in when he/she did - I have to say some of the replies really didn't help my mood level - but this post made me feel so much better. :A

To Credit-Crunched, who said "I know this is not to judge, but seeing a couple on nearly £2k of benefits writing off a £47k spending spree as us tax payers struggle along and fund your £500 food habit a month makes me sick" I'll just say your attitude is anything but constructive - I came here looking for advice and support at what was a particularly trying time for me even without the impending bankruptcy. A few years ago your comment would have made me feel suicidal - I'm just glad I waited as long as I did before posting - these days judgemental and presumptious people like yourself don't bother me any more - which is just as well given the tone of your comment. NOT ONCE did I say I was intending to write off a £47,000 spending spree, and nor did I say I was spending £500 a month on food. IF you've bothered to make it this far then you'll now have a better idea of how the debts arose an where our £500 "Shopping Budget" really goes. Maybe you'll change your opinion, maybe not. Either way I don't really care as you've just earned first place in my block list on these forums!

Thanks once again for the many helpful and constructive replies I did receive. I'll doubtless be back with more questions before this is all done and dusted. Off now to start on my DLA renewal form, Discretionary Housing Payment form, Housing Welfare form, and any other paperwork I can find to deal with while I'm "up". :j

Rylynn

:T Well said!

I wish you well, and I am sure you realise there are many people round here who will help you, answer any questions, just as I found out in 2008, there will always be the few who seem to want to judge others, but there are the many here who do not. BR is not easy, and it is not without stress and worry.

No one asks to be ill, or disabled, and those who are neither should really consider that before they jump in with both feet firmly in their mouths.

RL