Gym Membership - I'm in debt again!!!

NekoZombie

So here's an interesting problem;

I joined up to the gym in January, at a cost of £45 a month. I didn't include them in the bankruptcy, as technically its not a debt. Anyway, in my recent IPA shenanigans, the OR decided that I couldn't have an allowance for gym membership, and that it would have to be covered by any surplus in my I&E. As you may remember, I actually came in at a deficit of £20, so there is no surplus to speak of. I wrote to the gym saying that I was cancelling my credit agreement with them as I had been subject to a bankruptcy order in March. I just called the OR on a separate matter (STILL getting letters from HSBC - they issued me with a default yesterday!) and happened to mention the issue with the gym. Turns out that because it wasn't a debt at the time of bankruptcy, I'm actually still liable. I was pretty surprised at this; I genuinely thought I could just write the credit agreement off. So, if I'm still liable, then surely I need to be allowed £44.95 a month to pay off the new debt I've incurred since bankruptcy.

I also found out that my case is now being dealt with by the OR herself. I have just given up all hope of an early discharge. :mad:

wherediditallgo

NekoZombie wrote: »

So here's an interesting problem;

I joined up to the gym in January, at a cost of £45 a month. I didn't include them in the bankruptcy, as technically its not a debt. Anyway, in my recent IPA shenanigans, the OR decided that I couldn't have an allowance for gym membership, and that it would have to be covered by any surplus in my I&E. As you may remember, I actually came in at a deficit of £20, so there is no surplus to speak of. I wrote to the gym saying that I was cancelling my credit agreement with them as I had been subject to a bankruptcy order in March. I just called the OR on a separate matter (STILL getting letters from HSBC - they issued me with a default yesterday!) and happened to mention the issue with the gym. Turns out that because it wasn't a debt at the time of bankruptcy, I'm actually still liable. I was pretty surprised at this; I genuinely thought I could just write the credit agreement off. So, if I'm still liable, then surely I need to be allowed £44.95 a month to pay off the new debt I've incurred since bankruptcy.

Sorry to hear that, Neko. It seems you have to cancel these agreements before you go BR in order to create the debt. Until you cancelled the membership agreement, no debt existed so it couldn't be included in your BR - your monthly payment allows you access for that month, so you didn't have a debt to them, only a commitment to pay for a year or however long the agreement is for. When you cancelled the agreement, the debt (caused by you not being able to pay for the remaining length of the agreement) was created but that happened after you went BR, so that's why the OR won't include it now.

A similar thing arose with my dvd rental agreement. I didn't include it in my BR because I'd cancelled it well before I went to court, but after my hearing I got letters from the company saying I hadn't returned some dvds when I terminated the agreement (I had). When I spoke to the OR about it, the first question I was asked was had I cancelled the agreement & if so, when. I told the OR it was before my hearing, so I was told that I could include the charges for the dvds the company said they hadn't got back & any outstanding membership charges. Had I not cancelled until after my BR, I would have been liable for the lot.

I then asked if I'd have been allowed the money to pay for it if I hadn't cancelled before court, & he said no because it wasn't something essential, plus if I'd taken sufficient professional advice before going to court the point would have covered, but mainly because you can't include something in BR that isn't a debt. Basically, what he was saying was that if I hadn't taken enough advice to cancel the agreement before going to court, how it was resolved would be between me & the company to sort out, & the OR wouldn't get involved. That doesn't however mean that the same decision will be made for you - they all seem to operate according to how they feel on a given day. :rolleyes:

NekoZombie wrote: »

I also found out that my case is now being dealt with by the OR herself. I have just given up all hope of an early discharge. :mad:

Why is the OR dealing with your case herself - is it because you contested the IPA & went from £156pm to zero? That might have made you a case that they look at in more detail to see how/why the initial assessment was so different from the final one, to see what they did wrong if anything. It doesn't mean that you won't get an early discharge though, so don't lose heart.

NekoZombie

Sadly, yes, its all to do with the IPA. Of course, my I&E is about to change yet again, as I've just spilt with my partner and need to find somewhere else to live. Poop!

NekoZombie

wherediditallgo wrote: »

I then asked if I'd have been allowed the money to pay for it if I hadn't cancelled before court, & he said no because it wasn't something essential, plus if I'd taken sufficient professional advice before going to court the point would have covered, but mainly because you can't include something in BR that isn't a debt. Basically, what he was saying was that if I hadn't taken enough advice to cancel the agreement before going to court, how it was resolved would be between me & the company to sort out, & the OR wouldn't get involved. That doesn't however mean that the same decision will be made for you - they all seem to operate according to how they feel on a given day. :rolleyes:

At no point was this ever mentioned when I took advice from the CAB and PayPlan, and I do think its quite a harsh position. Ah well, LA Fitness are going to have to whistle for it. My credit rating can't be wrecked anymore than it already is. I wonder how long it will take them to issue a default?

fermi

That's a pain Neko. The gym, IPA, and the change in circumstances.
These things all happen at once.:(

When I went BR I wanted to dump my mobile contract, so I made sure that is wasn't paid with time enough for a 'reminder' and 'final reminder' letter to arrive to give to the OR.

I hope it all gets sorted out. At least you know your case is not being handled by some junior examiner who doesn't know what they are doing.

wherediditallgo

NekoZombie wrote: »

Sadly, yes, its all to do with the IPA. Of course, my I&E is about to change yet again, as I've just spilt with my partner and need to find somewhere else to live. Poop!

Oh dear As much as you might need to save the money, I suggest that you either find somewhere that costs very similar to what you pay now, but not a penny over, or find somewhere that's loads cheaper. When you submit your new I&E, the OR will look at your new rent & if it's possible to levy an IPA, they will. A £120 saving on rent will only benefit you by £50 at most, because you're likely to get a £50 IPA taking into account your previous £20 deficit.

NekoZombie

wherediditallgo wrote: »

Oh dear As much as you might need to save the money, I suggest that you either find somewhere that costs very similar to what you pay now, but not a penny over, or find somewhere that's loads cheaper. When you submit your new I&E, the OR will look at your new rent & if it's possible to levy an IPA, they will. A £120 saving on rent will only benefit you by £50 at most, because you're likely to get a £50 IPA taking into account your previous £20 deficit.

Why not a penny over wdiag? Will that peeve off the OR?

fermi

You just need to find somewhere that reflects the fair market value for someone in your situation.

That may on your own or sharing etc. The OR should not penalise you for a change in circumstances outside your control. As long as the cost of the place you find is reasonable, then you will be OK.

wherediditallgo

NekoZombie wrote: »

At no point was this ever mentioned when I took advice from the CAB and PayPlan, and I do think its quite a harsh position. Ah well, LA Fitness are going to have to whistle for it. My credit rating can't be wrecked anymore than it already is. I wonder how long it will take them to issue a default?

No, it wasn't mentioned to me either by the CCCS except in so far as to say that I should get rid of the dvd rental as it wasn't essential. The OR's use of 'sufficient' is important though - I only spoke to CCCS, so who's to say I wouldn't have been advised on this if I'd spoken to someone else? Sometimes I forget to ask certain questions & only remember if a question is asked or answered in a certain way. If the person on the other end of the line just gives me closed answers, I'm a gonner & end up having to call back.

I think the key is to terminate any non-essential agreements before going BR unless you know you can definitely pay for them even with the worst case OR scenario in place, as it's too late once you've had your hearing. Though I didn't ask the OR, I suspect the same situation would apply to a mobile phone contract.

It will probably take them a while to issue a default, but if you're lucky it will be issued while you're BR. I say that because there is a bright side to getting one. Once it's issued, it will only be on your credit file for the 6 years, so it's better to have the default while you're BR than to have them do nothing about it & just have it sitting on your credit file as an outstanding debt that they could default several months down the line, or even after you're discharged.

wherediditallgo

NekoZombie wrote: »

Why not a penny over wdiag? Will that peeve off the OR?

Well, you don't want to add to your existing commitments, & you've already got a £20 deficit. You pay quite a lot in rent - I know it includes bills & Council Tax, but I think they might wonder why you hadn't gone for a flatshare which might well have been cheaper. I think the greater the increase between your current rent & the new one, the more likely the OR is to question it.

You could have a look at Loot online when you're looking for somewhere. Places go quickly, but if you look online you'll get to see the ads before people who buy the paper. It's also a lot cheaper to look online than pay for the paper.

NekoZombie

fermi wrote: »

That's a pain Neko. The gym, IPA, and the change in circumstances.
These things all happen at once.:(

When I went BR I wanted to dump my mobile contract, so I made sure that is wasn't paid with time enough for a 'reminder' and 'final reminder' letter to arrive to give to the OR.

I hope it all gets sorted out. At least you know your case is not being handled by some junior examiner who doesn't know what they are doing.

They say these things happen in threes. Here's hoping no new hassles. Of course, I somehow have to get money for a deposit and removal van together. My gran has sent me a cheque for £1000 - £500 an early birthday present, £500 a loan to be paid back. Its going to be difficult to pay back when I have to pay for my 'expensive' hair treatments and gym membership out of my housekeeping budget already. Sorry, I know I'm whining.