reasonable housekeeping figures DRO

wba31

malnuman wrote: »

hi again, yeah doristrousers, your correct, i used the £400 as i didnt have my details to hand, but stepchange did indeed use £428 as my all in housekeeping figure, based on my original expediture form i filled in.. i found the stepchange DRO team a great help with my application.. i moved from a fee paying DMP to a DRO in less than 2 months and now there is a load of pressure and worry off my mind..

That's awesome that you have had the help you require. If I had a drink i'd raise it to you being debt free once your DRO ends!

Depth_Charge

DorisTrousers wrote: »

StepChange don't need to justify themselves? I would disagree with that fundamentally. We all need to justify ourselves on an ongoing basis, and SC aren't above this by any means. If they, or anyone else, think that they are then a hefty dose of reality seems in order.

Phone for a single person, at maximum SC guidelines, is £15 higher than CFS trigger, but only £7 higher at guideline. Creditor reps won't accept maximum, so they will go off guideline. Phone for a couple from CFS is £2 higher than SC guidelines.

Not life changing amounts either way. Where your argument falls down, to a massive extent in my own humble opinion, is where there are couples, single parents with children and especially where there are couples with children. Let's just take housekeeping and "other" for a couple on CFS, and compare it against guideline SC.

Including all the variables quoted on SC guidelines (covered by other in CFS) such as dentist, medicine, hair, sports, contingency etc etc, and assuming every client does have satellite and pets, then CFS is £293 per month higher. Ah, I hear you say, but what about a comparison with MAXIMUM SC guidelines. Fair enough, but you are still talking about a differential of £161 per month. These are much more significant amounts than £2 or £7 I am sure you will agree. For balance, don't forget that SC, according to their own report, will present cases with zero allowances in certain categories as well, scandalously (in my view anyway) including the option to list clothing as a zero, so taking guideline figures, and zero's where SC allow zeros in all the various categories, then SC fall £454 behind CFS. These differentials get much, much greater when you factor any children in.

Very hard, therefore, not to heartily agree with Depth Charge that CFS IS far more generous than SC (this is becoming a habit, agreeing with Depth Charge...) but in the case of DRO's that you allude to, it matters little whether SC, CFS or detailing a debtors own version of expenditure without referring to any guidelines at all, is used as long as the resultant figure at the end comes up at less than £50. Where it DOES matter, and what this debate is more about, is where SC is used to calculate affordability on IVA's and CFS isn't, as, again, creditor representatives won't have CFS as a basis for IVA's. You can drag the debate across to DMP's as well if you like, but SC won't be using CFS for those either as they have their own debt remedy tool. Or guidelines, if you prefer.

Hi

This is as good and professionally put post as you will ever see on the issue

I totally agree on everything you have said here and it is therefore hard to say anymore

The CFS allowances are without doubt clearly much more generous than the Stepchange version.

Excellent post indeed.

My take

DC

Depth_Charge

DorisTrousers wrote: »

If that is what you spend then that is entirely appropriate. Interesting that, ignoring kids ages, it is £29 lower than SC guidelines would come out at, and miles lower than the CFS could go to. Don't get me wrong, this isn't about StepChange, or having a go at them in any way, but much more about the massive gulf between the different figures available.

Personally, I would prefer just one. Which one to use is a different matter of course, but having two naturally presents a very big danger of putting people into potentially inappropriate debt solutions. That is certainly a major risk in the commercial sector, as it is obvious that they have to sell their own products to exist and survive, but it is clearly a risk in the not for profit or free sector as well. I wonder how many people are on a DMP (or IVA of course) and struggling, because of a budget drawn up using one set of figures, where they could be debt free with a DRO for £90 using another set? Given the amount of people known to be on DMP's, with both the free and fee paying sectors (and IVA's of course) and I suspect the answer runs into many tens of thousands, if not hundreds of thousands. There is a real perversity here, and one set of guidelines only would go a long way towards reducing the risk of inappropriate debt solutions being entered into.

HI once more

Again an excellent post, very professionally put

I personally could not add to or improve on this post so no point in me trying.

As always, my genuine take

DC

longtermplanner

wba31 wrote: »

The SC guidelines cant be as strict as we all like to believe if they are doing 20% of the UK's DRO's with 2% of the intermediaries as the recent figures advised...

The DRO figures are indeed striking. StepChange and Payplan must have a pretty similar client profile, yet SC do about 20 times as many DROs. No prizes for guessing why!!!!

Personally I am with the others here in preferring the CFS numbers and disliking the zeros SC can allocate for expenditures which to me don't seem to be optional at all over a long period of debt management. This may mean that some SC clients on DMPs and IVAs are struggling. However I don't think it means that SC divert people who could have qualified for a DRO onto a DMP or IVA. Plenty of commercial debt management companies do however.

NorthFin

longtermplanner wrote: »

The DRO figures are indeed striking. StepChange and Payplan must have a pretty similar client profile, yet SC do about 20 times as many DROs. No prizes for guessing why!!!!

Can you tell the reason why, for someone who doesnt understand?

wba31

NorthFin wrote: »

Can you tell the reason why, for someone who doesnt understand?

Step Change are a charity, therefore not allowed to make a profit. Payplan are not and therefore can make profit.

NorthFin

wba31 wrote: »

Step Change are a charity, therefore not allowed to make a profit. Payplan are not and therefore can make profit.

What difference does it make? A DRO is £90 with either, how can payplan make a profit?

Sorry if it is an obvious question?

wba31

NorthFin wrote: »

What difference does it make? A DRO is £90 with either, how can payplan make a profit?

Sorry if it is an obvious question?

They don't make profit off DROs, the fees are paid direct to the Insolvency Service.

Where concern may lie is that someone approaches an organisation for debt advice, say they owe £4000 and have a £40 surplus, no assets. It could be the surplus comes about by previously having to cut back on food/clothing to repay debts. The DRO could well be the best option, but if the organisation has one eye on making money, they could coerce the client into a 8 year DMP instead. Once would hope the free debt advice providers avoid this type of behaviour, but without seeing them work from the inside out it's hard to say.

The bigger picture is what if same client had £100 surplus. Are conversations being had where suggestions are being made that a DMP on the face of it is an option, but actually with modest items of expenditure are being made more realistic, DRO becomes an option that could be far better for the individual.

Through any differences of opinions between advisors on these forums, and in this thread, all that we all want to see if people getting the best, correct advice wherever they go for that advice.

NorthFin

Where is the best place to get an idea of the max numbers allowed please?

I know there have been a few links in the past but which is the most uptodate please?

For example how much for a couple with so many kids for food and fuel etc?

DorisTrousers

These are not publicly available I'm afraid.