IVA support and discussion thread
Options
Comments
-
UpToMyNeckInIt wrote: »Hi DC & FTR,
Some really useful information in these last few posts.
Totally agree that expecting £1000 worth of car to last for the duration of bankruptcy is not realistic in most cases, and this really should be reviewed. Sadly I suspect that there is no political will to do so.
DC You should post those excellent links regarding the various allowances, on the 'Bankruptcy and Living With It ' board as well.
Will get back to you in due course when I have a chance to compare them with the Stepchange guidelines. Any serious discrepancies perhaps merit further discussion.
You could be areal star and put up a link to the latest Stepchange guideline as well of course!!!
Yes, for those of us who seemingly have to have our expenditures 'dictated' by these same 'guidelines', it is slightly irritating that there is one rule for iva's and another for bankruptcy. But this in turn is determined by the creditors, and explicit adherence to the same required in the protocol.
The irony of ultimately having your expenditures dictated by a creditor-funded organization is not lost on me. Hence why I max-out my allowance claims where possible to ensure I have enough to get by reasonably well.
Hi
Let nobody be in any doubt that I am in the genuine free independent impartial advice camp, firmly entrenched you might say.
However, some of the things I see around leaves me and others with no choice but to voice our opinions and make no mistake whatsoever this will continue and likely go to another level. Too not voice these concerns could leave us totally exposed and undermine our very existence as maybe some would like to see. No need to worry as this is not going to happen, on the contrary we may be going on the offensive if anything, we have no choice.
The car issue in bankruptcy is plainly ridiculous in my opinion and gives IVAs a clear selling point advantage if you like. More important is the situation for those in debt who may be denied a genuine choice or swung towards a more risky insolvency solution.
Debt advice is supposed to be independent and impartial in the best interests of those in debt every time. you cannot make it up as you go along or to make a solution fit by moving the goalposts.
People undertake a debt solution that can impact on their lives for many years, they may have families, children, health issues and more, they deserve the right and appropriate solution.
In my opinion it is a fair argument to suggest that the most income is to be generated and money is to be made out of Debt Management Plans and IVAs over Bankruptcy and Debt Relief Orders.
When you depend on profits or generated income then what could be the argued preference? throw in the marketing and sales people and think about it.
Full independent, impartial advice based on full circumstances and information available (including all the industry accepted expenditure allowances) the person or people in debt then make the appropriate choice, for example: bankruptcy, Debt Management Plan, Debt Relief Order or IVA.
Is the above what we are really getting on a consistent level, is it really?
Stepchange have posters on here that have in the past made comments on other organisations, yet they seem very reluctant to get involved when the finger is pointed at them, now why is that, this is an organisation that claims to be the leading charity and spends how much on TV advertising?
Like I say my opinions and again I fully stand by them.
On the subject of being a star, not me UPTMNII, I am no star, I just tell it like it is and I am here ready to take on the debate, I wont run or hide, there is no need to worry about that.
I have the figures as you a most likely aware and I might put them up or part of them, but in the meantime lets give Stepchange the chance, after all they are their figures as used in their Debt Remedy Tool (where they can be found)
The coach and horses is saddled up however, but I strongly suspect that Stepchange already know this:)
We are all friends really:)
My take0 -
Hi
Below is the link to National Debtlines Self Help DMP Booklet
A few pages down a set of expenditure allowance guidelines that might be of interest and may (depending on opinions) highlight and re-enforce a number of the points I have raised.
http://www.nationaldebtline.co.uk/england_wales/pdf/self-help-pack/self-help-pack-full.pdf
Happy days ahead:)0 -
In my rather somewhat weird illogical thinking though, how do you know where to get genuine free independent impartial advice?
It is only if you are inclined to question things to find out where the funding comes from with the debt charities do you find there is what could be considered a conflict of interest here and to be honest I think a lot of people would feel they are getting the best advice because it is a charity and someone you can trust to give you the right advice. On the other hand some people would probably think as they are paying for the service they are going to get the right advice. CAB has seen their funding cut especially as some local councils have decided to award tenders to other organisations probably based on cost and with an increase in demand for their services, people are going to look at other options, after all it is now a consumer choice world out there in so many aspects of life.
I don't think there is going to be standardisation on budgets as each will come up with it's own based on their own research which as I have found in my job, the results can be wildly different depending on who has paid for the research.
Yes I am all for debate and for challenging when things are wrong but I also believe in own personal responsibility and I think people in debt should also be a bit more involved in researching their debt options.
Wisdom comes from experience. Experience is often a result of lack of wisdom.0 -
...Well said: Each person doing their own research is the way to go.
We have to bear in mind as well though, that people in bad debt tend to panic to some degree when they realise that there is no more credit to fall back on (I remember doing so). This of course can leave them vulnerable to potential mis-selling of whatever debt solution you care to mention.
Plenty of accounts on these forums from people who have merely accepted the first 'lifeline' which came along.
Eg: accepting a 15-Year DMP via a charity, only to realise that 3-4 Years on, a 5-6 Year IVA might have been a better option; or
Someone on a relatively low income with few assets, being mis-sold an IVA, and agreeing to live on unrealistically low allowances for the next 5-6 Years, when a DMP or going BR may have been a better solution.
Going back to the subject of expenditure:
The allowance system is what it is for the various debt solutions. Nothing I can do about that, but I am determined to make the best of my situation.
DC, maybe you can elaborate further: My first impression (please bear in mind though that I have not looked at each area in forensic detail), is that the various allowance/expenditure systems, all work out about the same, by the time you factor everything in.
Example: My IVA company have agreed relatively generous allowances with my creditors – over and above those listed in 'The Stepchange guidelines', eg: a Monthly allowance for 'taxi journeys' for my Wife (she does not drive), and an allowance for public transport fares for me - all on top of my car maintenance / fuel allowances etc. I am also careful to properly review these at the appropriate time.
I must therefore back-track to some degree, on my earlier opinion about IVA companies being rigidly restricted to 'The Stepchange guidelines'. Generally they are I’m sure. But exceptions can be made (as should be the case: guidelines are guidelines after all). Clearly though, this type of ‘variable’ expenditure will be considered only on a case-by-case basis, with some IVA firms fighting their customer’s corner better than others.
Can the same type of thing be applied with the other guideline I/S, DFS figures etc. I wonder?0 -
Find_The_Real wrote: »In my rather somewhat weird illogical thinking though, how do you know where to get genuine free independent impartial advice?
It is only if you are inclined to question things to find out where the funding comes from with the debt charities do you find there is what could be considered a conflict of interest here and to be honest I think a lot of people would feel they are getting the best advice because it is a charity and someone you can trust to give you the right advice. On the other hand some people would probably think as they are paying for the service they are going to get the right advice. CAB has seen their funding cut especially as some local councils have decided to award tenders to other organisations probably based on cost and with an increase in demand for their services, people are going to look at other options, after all it is now a consumer choice world out there in so many aspects of life.
I don't think there is going to be standardisation on budgets as each will come up with it's own based on their own research which as I have found in my job, the results can be wildly different depending on who has paid for the research.
Yes I am all for debate and for challenging when things are wrong but I also believe in own personal responsibility and I think people in debt should also be a bit more involved in researching their debt options.
Hi
Good questions
Basically there has to be standards, guidelines, protocols even rules and laws as these are what provide (or should do) the safety net for those in debt or seeking advice on debt issues and problems.
There are agencies and regulatory bodies that do (or are supposed to) make sure that standards are maintained and raised if you like. There are also the courts.
There are agencies that highlight issues as part of their procedure and remit and long may it continue.
There are forums like this one that play an important role in my opinion, it is hard to hide on an open forum like this and anyone can have their say which is great.
Agencies and their representatives know (or should do by now) that making statements on open forums can be very dodgy ground if they are not careful (some choose to play safe and keep quiet:)
Without the above it would turn into a free for all and chaos would follow.
The commission, sales, marketing and profit making people would then do what they always eventually do, no prizes for guessing that one
You make some really good points on the funding and I sometimes wonder about where some in the CAB are at, maybe cosy consensus could be mentioned in some quarters (I will likely get it in the head for this comment but I say it as I see it).
The CAB have to remain independent and impartial, the road to nowhere awaits if they get took too far in by some of the smiley face sales and marketing people who sometimes frequent their offices, conferences and meetings, they are no real friends of ours.
The CAB are a huge trusted organisation that is full of good people, many who give up their time for nothing to help, a strong independent, impartial CAB is needed more than ever in these difficult times.
There you go, a down to the nails type of post, I can now get ready for the snipes and the rest, cant wait.
My genuine take as always0 -
UpToMyNeckInIt wrote: »...Well said: Each person doing their own research is the way to go.
We have to bear in mind as well though, that people in bad debt tend to panic to some degree when they realise that there is no more credit to fall back on (I remember doing so). This of course can leave them vulnerable to potential mis-selling of whatever debt solution you care to mention.
Plenty of accounts on these forums from people who have merely accepted the first 'lifeline' which came along.
Eg: accepting a 15-Year DMP via a charity, only to realise that 3-4 Years on, a 5-6 Year IVA might have been a better option; or
Someone on a relatively low income with few assets, being mis-sold an IVA, and agreeing to live on unrealistically low allowances for the next 5-6 Years, when a DMP or going BR may have been a better solution.
Going back to the subject of expenditure:
The allowance system is what it is for the various debt solutions. Nothing I can do about that, but I am determined to make the best of my situation.
DC, maybe you can elaborate further: My first impression (please bear in mind though that I have not looked at each area in forensic detail), is that the various allowance/expenditure systems, all work out about the same, by the time you factor everything in.
Example: My IVA company have agreed relatively generous allowances with my creditors – over and above those listed in 'The Stepchange guidelines', eg: a Monthly allowance for 'taxi journeys' for my Wife (she does not drive), and an allowance for public transport fares for me - all on top of my car maintenance / fuel allowances etc. I am also careful to properly review these at the appropriate time.
I must therefore back-track to some degree, on my earlier opinion about IVA companies being rigidly restricted to 'The Stepchange guidelines'. Generally they are I’m sure. But exceptions can be made (as should be the case: guidelines are guidelines after all). Clearly though, this type of ‘variable’ expenditure will be considered only on a case-by-case basis, with some IVA firms fighting their customer’s corner better than others.
Can the same type of thing be applied with the other guideline I/S, DFS figures etc. I wonder?
Hi
Good post again
In answer to your question on the various allowance / expenditure systems -
No, they do not all work out about the same
The Money Advice Service are talking about 'harmonising' the Common Financial Statement and Stepchange expenditure allowances so I understand.
If the above ever happens I don't know where this would leave the O/R HES guidelines that are used in B/R.
Like you correctly say these are all guideline figures only, not the law and can be challenged.
Travel costs are a very interesting area, I challenged a proposed Income Payments Order at court sometime ago and basically got the result we wanted after near on a year wrangling with the O/R and two positive reviews later (if I remember rightly)
What was really interesting in that particular case was that the District Judge carefully scrutinised our clients travel costs that had basically already been accepted by the O/R (we were just disputing the food / housekeeping allowances).
A bit of humour for you UTMNII - have you heard the one about the annual review where the adviser said, oh yes your food, utilities and general living costs have increased, we must allow you extra for that, but maybe you don't need any new clothing for the next year, hey presto your expenditure has not really changed after all look:)
Like I say just humour..a joke even!!!
My take again:)0 -
Hi DC,
Harmonised allowances would make life easier all round, and should theoretically lead to more consistent advice for customers with debt problems. I suppose it would make life easier for those of you working within the industry as well.
So, regardless of which debt management option you go for: DMP, IVA, BR or whatever, you have the same allowances – more straightforward and much fairer.
I hope you will keep us posted on the above point.
No, I had not heard that ‘joke’ - I bet we will on these forums soon though!!! …and I am sure the customer on the receiving end would not find it funny.
The situation you describe could so easily become reality: The SC guide now allows £0pcm as a minimum clothing allowance. So you could theoretically have a customer present an annual review where, maybe their net income has effectively reduced slightly, due to increased outgoings, but rather than risk reducing creditor dividend forecasts, the IP merely cuts the clothing allowance to balance the books. They can now of course do this, and still be compliant with the 2013 SC guidelines. I suspect as well, that few customers would seek to challenge this, but merely ‘struggle’ to otherwise get by instead. (Plenty out there that clearly don’t seem to properly review their income/expenditure – not least due to a lack of ongoing support from their IVA firm).
I would like to think however, that most responsible IVA companies would not be quite as hard-nosed as that – but it is possible. After all, I bet most of these reviews are handled by relatively lowly-paid, sometimes poorly trained support staff, some of whom probably have little empathy with the customer (I’ve encountered one or two, and I am sure I am not alone on that one), and merely pass these to be ‘signed off’ by the IP.
However, most IVA’s have the discretion to reduce payments by up to 15%, and I would like to think that this would be considered an option as well in this scenario.0 -
UpToMyNeckInIt wrote: »Hi DC,
Harmonised allowances would make life easier all round, and should theoretically lead to more consistent advice for customers with debt problems. I suppose it would make life easier for those of you working within the industry as well.
So, regardless of which debt management option you go for: DMP, IVA, BR or whatever, you have the same allowances – more straightforward and much fairer.
I hope you will keep us posted on the above point.
No, I had not heard that ‘joke’ - I bet we will on these forums soon though!!! …and I am sure the customer on the receiving end would not find it funny.
The situation you describe could so easily become reality: The SC guide now allows £0pcm as a minimum clothing allowance. So you could theoretically have a customer present an annual review where, maybe their net income has effectively reduced slightly, due to increased outgoings, but rather than risk reducing creditor dividend forecasts, the IP merely cuts the clothing allowance to balance the books. They can now of course do this, and still be compliant with the 2013 SC guidelines. I suspect as well, that few customers would seek to challenge this, but merely ‘struggle’ to otherwise get by instead. (Plenty out there that clearly don’t seem to properly review their income/expenditure – not least due to a lack of ongoing support from their IVA firm).
I would like to think however, that most responsible IVA companies would not be quite as hard-nosed as that – but it is possible. After all, I bet most of these reviews are handled by relatively lowly-paid, sometimes poorly trained support staff, some of whom probably have little empathy with the customer (I’ve encountered one or two, and I am sure I am not alone on that one), and merely pass these to be ‘signed off’ by the IP.
However, most IVA’s have the discretion to reduce payments by up to 15%, and I would like to think that this would be considered an option as well in this scenario.
Hi
Yes, it makes 'common' sense:)
On the subject of the 'joke' maybe it could apply to another debt solution other than an IVA, maybe the 'joke' could be slightly re-worded and also apply to debt advice at the outset (see below)
Oh, your DI is in deficit or only £30 per month , well....if you don't buy any clothes for the next year or ten then your DI may look a little different and so might your debt solution options.
See the humour:) a lot of us have
It has to be consistent anything else is a JOKE
My take as always0 -
A 'joke' the SC guidelines may be to some. But in my experience as an IVA customer, I have found that if you can negotiate around the 'max' allowances, you can live quite reasonably. They certainly allow me a lot more expenditure than I allowed myself when I was attempting to repay all my creditors in full.
Ultimately, using these allowances, my IVA repayment makes up a manageable 7-10% of my take-home income, as opposed to the 25-30% my debts were costing me.
I can live with that.
Could you even argue that BR customers should be allowed more in the way of day-to-day expenditure than IVA customers to compensate for the even-more restricted lifestyle they have to adopt in the BR process?
Allowed car value being a glaringly obvious example - though I am sure many IVA customers also have a car on its last legs as well. But factor in the OR selling your assets - including your home potentially, the wider requirement to declare 'bankruptcy' rather than 'insolvency' in day to day life etc.
...I am sure the experts among you could 'compare and contrast' even more.
But, maybe all the above has been factored in as well in their apparently more 'generous' allowances?
By the same token though, for SC to suggest that the current IVA allowances are based on 'what our clients tell us they spend' is a nonsense.
For example: At the outset of the IVA process, I recall being told that I spent 'too much' [above the SC guidelines] on the weekly shop by my 'Insolvency and Rescue' award-winning IVA-packaging firm. So they promptly went on to list expenditure in other areas, that I did not necessarily use in full, to off-set this. Eg: the 'taxi allowance' for my wife is way more than she actually needs, so we can use that to supplement other areas.
I am sure my IVA company is not alone in doing this type of thing. After all surely: The more restrictive you make an IVA customer's expenditure, the greater the chance that their plan will fail.0 -
Depth_Charge wrote: »Hi
Following on
Below is a link to the April 2012 I/S Bankruptcy guideline expenditure allowance tables -
http://www.insolvencydirect.bis.gov.uk/freedomofinformation/technical/TechnicalManual/Ch25-36/Chapter31/part7/Annex%20D.htm
Maybe compare these with the Stepchange figures, in particular look at the clothing and footwear allowances.
The I/S figures are not the law either and can be challenged depending on circumstances.
There is also the Common Financial Statement figures that are industry recognised and acceptable for Debt Relief Orders (I cannot put these up due to the rules)
We keep hearing that the Stepchange figures are used in IVAs, do you see the potential contradictions?
It would appear sometimes that the Stepchange figures suit the IVA people and on other occasions Stepchange get criticised for being creditor sponsored.
Stepchange are almost 100% funded by the creditor I understand and the majority of their revenue comes from money they receive for their Debt Management Plans.
Make your own minds up
My opinions and views with comments very welcome
The subject is not going away and the challenges are coming
DC
Hi DC,
Had a better chance to look at those figure.
http://www.insolvencydirect.bis.gov..../Annex%20D.htm
OK, so in a family like mine: 2 adults, 1 child, the IPA clothing allowance is £128.50, vs the £75 I currently allow - fair enough.
Many other areas seem comparable though.
But IVA customers can claim for a raft of other expenditure (unless I am misreading the above link), which BR customers cannot:
Eg: Mobile phone: £25
laundry/dry cleaning £40
newspapers/magazines £25
satellite subs. £26
pet-care - £40
car breakdown cover £15.
...to name but a few. Plus my 'travel' allowance exceeds the IS quoted figures by a good £100.
...and that's using the 2012 SC guidelines.
Unless I have misunderstood something, I reckon you are better off with the SC guidelines.0
This discussion has been closed.
Categories
- All Categories
- 343.3K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.4K Work, Benefits & Business
- 608.2K Mortgages, Homes & Bills
- 173.1K Life & Family
- 248K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards