IVA Expenditure Allowance

Max_Maxwell

Annual I&E review now due. I asked my IP if expenditure allowances had increased as it's been 3 years and not increased so far. It seems not.

Can someone point me in the direction of the most up to date figures please?

Many thanks.

cheesedoffwithdebt

I am also in year three of an IVA and agree, it gets tighter, particularly when prices have gone up as much as they have in recent years.

However my understanding is that once the IVA is agreed, changes can only be made with the agreement of your creditors, and if your allowance was increased they might ask you to continue paying for longer to cover what was their original recovery percentage.

Is there not scope with your other expenditure to change what you spend on what?

I've worked damn hard to keep my utility bills down, and pay less now than I did 4 years ago ( free solar panels did help).

I think what I am trying to say is that the IVA at the outset promises a certain amount back to your creditors. If you free up some of your income , they will still be wanting that same money back, so I am gritting my teeth, determined to get this over and done with as soon as I can.

UpToMyNeckInIt

I have heard of this type of problem before. IVA customers agree expenditure at the outset, but never properly review it. (I cynically imagine that some IPs don’t exactly go out of their way to create more work for themselves by encouraging the customer to fully review expenditure regularly. But they are quite happy to sniff out any additional income you may have).

Regarding what is deemed 'reasonable' expenditure, google: ‘CCCS Budget Guidelines Report 2011’. All IPs that I’ve come across make reference to this. Download the pdf.

(There is an October 2012 version, but I cannot find a link to download it. I believe the 2011 document was effective from October 2011, and used in my IVA implemented in July 2012).

However, even if the figures are a little off (although I understand that many areas have not changed significantly), it is well worth a read, as it covers every form of expenditure, right the way down to allowances for hairdressing, kid's school dinners, meals at work, even hobbies etc if so required.

My suggestion to keep IVA payments as low as possible, particularly if you have had pay rises etc: Come review time, claim all 'allowances' that apply. Any that exceed the guidelines (notably, the weekly shop, petrol, car maintenance etc.), put your actual expenditure - back that up with receipts. (Obviously don’t do anything fraudulent like claim for a Sky subscription when you don’t have one etc).

For me it’s a balancing act between paying back my agreed minimum dividend, but I don’t want my IVA payments going up too much either. At the reviews (my first is in July), I am going to attempt to wipe out any income increase - not that I anticipate anything significant, by demonstrating increased expenditure.

SPELLKASTER

Im in the first year of my IVA being due for its annual review.

I did play bingo online and either deposited £20 or £30 a week.

I've now stopped doing this as I realised they might moan about it.

I'm just concerned that they might try and increase my monthly payment.

If Halifax hand't lent me all this money in the first place, I wouldn't be in the mess I'm in now.

If they try and increase my monthly contribution, can I object because of the increase to the cost of living as everything has gone up?

ILW

SPELLKASTER wrote: »

Im in the first year of my IVA being due for its annual review.

I did play bingo online and either deposited £20 or £30 a week.

I've now stopped doing this as I realised they might moan about it.

I'm just concerned that they might try and increase my monthly payment.

If Halifax hand't lent me all this money in the first place, I wouldn't be in the mess I'm in now.

If they try and increase my monthly contribution, can I object because of the increase to the cost of living as everything has gone up?

What did you spend it on?

lazer

SPELLKASTER wrote: »

Im in the first year of my IVA being due for its annual review.

I did play bingo online and either deposited £20 or £30 a week.

I've now stopped doing this as I realised they might moan about it.

I'm just concerned that they might try and increase my monthly payment.

If Halifax hand't lent me all this money in the first place, I wouldn't be in the mess I'm in now.

If they try and increase my monthly contribution, can I object because of the increase to the cost of living as everything has gone up?

Halifax lent you the money because you asked for it - they do not give you a loan without you signing for it and requesting it.

markt89

lazer wrote: »

Halifax lent you the money because you asked for it - they do not give you a loan without you signing for it and requesting it.

Whilst i understand your comment i feel it is unessary and given the culture of lending that has been in the past i think both sides are to blame. Banks would lend money to people with far less checking of income and expenditure than they should have as they were making so much money lending money to anyone , money was cheap . To blame the person taking out the loan is also wrong as how many adverts and offers of loans were we all bombarded with in the past , marketing i think of it as more of preying on the weak and vunerable. I take my hat off to the poster as they are recognising they have a problem and have gone into a iva , these boards are a source of support and help and never abuse remember we all make mistakes and living with them is as difficult as learning from them

keep smiling and remember your debtors dont loose any sleep over you not been able to afford the repayments so dont you loose sleep (it may affect your credit rating should be re worded may affect you chance of getting into debt and increase your stress and anxiety so do you realy need this loan )

to add will a salesman tell you all the reasons not to buy their goods no they only tell you the good and hide the rest in smakll print , banks make money out of selling money enough said !!!!

chin up;)

UpToMyNeckInIt

SPELLKASTER wrote: »

Im in the first year of my IVA being due for its annual review.

I did play bingo online and either deposited £20 or £30 a week.

I've now stopped doing this as I realised they might moan about it.

I'm just concerned that they might try and increase my monthly payment.

If Halifax hand't lent me all this money in the first place, I wouldn't be in the mess I'm in now.

If they try and increase my monthly contribution, can I object because of the increase to the cost of living as everything has gone up?

...If you are faced with the prospect of an increased payment, but can prove if asked, that your expenditure has increased, then you may have a case to resist this. I would hope that most IP's will be fairly reasonable in this respect.

Max_Maxwell

cheesedoffwithdebt wrote: »

However my understanding is that once the IVA is agreed, changes can only be made with the agreement of your creditors, and if your allowance was increased they might ask you to continue paying for longer to cover what was their original recovery percentage.

Thank you for your feedback.

I take your point but would argue that some tolerance should be allowed to avoid the risk of the IVA failing. If the cost of living is rising and the repayment amount agreed at the outset cannot be maintained, the entire basis of an IVA being an affordable and attainable route to legal debt-freedom is flawed.

The IP stresses at the outset that you must be able to maintain the payments you are agreeing to but that same defining principle of the IVA becomes a moot point years into the arrangement and when one is at most risk of failing.

Going into an IVA is like going on a diet. We can manage for so long without the treats and gain comfort from the 'belt-tightening' but in time the novelty wears off and the plan becomes unsustainable.

Is it any wonder so many IVAs fail? It doesn't take a rocket-scientist to see the short-sightedness of the thinking behind the principle of the IVA.

Max_Maxwell

UpToMyNeckInIt wrote: »

I have heard of this type of problem before. IVA customers agree expenditure at the outset, but never properly review it. (I cynically imagine that some IPs don’t exactly go out of their way to create more work for themselves by encouraging the customer to fully review expenditure regularly. But they are quite happy to sniff out any additional income you may have).

UpToMyNeckInIt did touch on this same scenario in his post too. Sorry, it wasn't my intention to plagiarise.

cheesedoffwithdebt

I agree with Max's last post on this. At the outset you have no way of guessing how prices will rise over the 5 years, I've not had a payrise since my IVA started but I can and do earn more money by getting bonuses so I've saved those to meet future living expenses ( as well as paying over 50% to the IP of course) and that has worked.

If I had a payrise then yes I'd be stressing that the cost of living has similarly risen and argue strongly against increasing my IVA payments, but regarding Uptomyneckinit's comments, the IP does of course work on behalf of the creditors once your IVA is in force so they are not batting for you.

But I'd take heart frankly- my understanding is that many IVA's fail in the first year.

If you, like me, are three years in, could I suggest that the worst is probably over now?

That's how I am viewing it anyway.

The end is in sight and sadly I am counting the days (!!) I have them marked on my calendar.

It's not forever- there are loads of people living on benefits and on much less than me, so I see myself as still fortunate.