IVA and Bankruptcy expense question

alastairq

pre 2011, bankrupts were expected to pay a proportion but not all of their disposable income to an IPA. This was often described as "50/50".

Although every penny of surplus income could be taken, regardless of the year....the IS guidelines at the time set an 'allowance' of £99 surplus, beyond which an IPA would be sought.

Since the IS had..& has, to be entirely self-financing, around December 2010 the IS changed their guidelines to the present system...simply to fund its activities.

I have to admit,being involved in a personal BR prior to the above date, I never came across any mention of any 50/50 system........unless, I suspect, it referred to a personal BR where there was an asset [property?] with positive equity, and an interest?

greek-dave

andyuk01 wrote: »

Out of curiousity could you have serviced your debts if you didn't spend £300 per month on livery fees prior to BR?

No. My total debts were around the £70k mark and my monthly payments to service these were around £2500 per month. Like with all BR's you have to be able to prove to the court that you have little, or no, chance of ever being able to repay them.

greek-dave

wharty wrote: »

Nobody would expect you to have the Horse destroyed but maybe you should have given the horse up and sold it. Having a horse sounds like a luxury to me. A cat or dog costs nowhere near what a horse would. Cats and dogs can be given to the local RSPCA cattery if needed.

Would a smoker or an drinker be expected to pack in their habit? I doubt it, as it would be against their human rights and even prisoners have access to Sky TV. I have neither and like I said in an earlier post, I have managed to trim or cut every perceivable "luxury" to either a minimum, or to nothing. I have been totally honest with the OR and IP and have even declared assets to them that they would otherwise have never known about, or been able to find out about.

Anyway, the horse has been with us for many years and is classed as a member of the family. He is to old to be sold or given away and given that I have cut everything else from my life their is no way on this earth that I would give him up.

JCS1

greek-dave wrote: »

Would a smoker or an drinker be expected to pack in their habit? I doubt it, as it would be against their human rights and even prisoners have access to Sky TV. I have neither and like I said in an earlier post, I have managed to trim or cut every perceivable "luxury" to either a minimum, or to nothing. I have been totally honest with the OR and IP and have even declared assets to them that they would otherwise have never known about, or been able to find out about.

Anyway, the horse has been with us for many years and is classed as a member of the family. He is to old to be sold or given away and given that I have cut everything else from my life their is no way on this earth that I would give him up.

Cigarettes are not an allowable expense, the person would have to find the money from making savings elsewhere in their budget.

Depth_Charge

Hi

Interesting thread:)

Useful B/R expenditure allowance IPA / IPO info below from Citizens Advice

http://mymoney.nedcab.org.uk/moneyadvice/ipaipo.asp

DC

TheGardener

"Would a smoker or an drinker be expected to pack in their habit? I doubt it, as it would be against their human rights and even prisoners have access to Sky TV"

Smoking, alcohol and 'entertainment' are not included in the OR's guidance notes for expenses as far as I am aware, neither is satellite TV of any description unless included in a basic telephone/internet/TV package. As for animals - I am aware of a BR who had 3 dogs and was basically told their food would have to come out of the family food budget as the OR only felt it reasonable to include an allowance for 1 dog...

IPA's are agreements between the OR and the BR - everyone has different priorities. From greek-daves main post; you do appear to have had quite a different experience of the BR process compared to many of us on here. This is why it is quite difficult to give people advice - experiences vary so widely.

wharty

greek-dave wrote: »

Would a smoker or an drinker be expected to pack in their habit? I doubt it, as it would be against their human rights and even prisoners have access to Sky TV. I have neither and like I said in an earlier post, I have managed to trim or cut every perceivable "luxury" to either a minimum, or to nothing. I have been totally honest with the OR and IP and have even declared assets to them that they would otherwise have never known about, or been able to find out about.

Anyway, the horse has been with us for many years and is classed as a member of the family. He is to old to be sold or given away and given that I have cut everything else from my life their is no way on this earth that I would give him up.

Cigs and booze are addictions and come from the food/shopping allowance. Are you saying you have an addiction to Horses or a problematic Horse habit? Are you a prisoner? There is no relevance between being bankrupt and being a prisoner so why bring it up? I have zero luxuries as a bankrupt and in my opinion the horse should be given up.

luvchocolate

The thing that confused me was greek-dave said he went br in August but is quoting from 2010 rules.
I would find that very misleading if I was just doing research in preparation for br.
does not add up

greek-dave

TBF there is allot of information on official web sites that is not accurate: GOV.UK/Bankruptcy being one

4. Your assets

Your assets will be sold to pay your bankruptcy debts. You have to hand over your assets to the person appointed to manage your bankruptcy. This person is called your ‘trustee’ and can be:

an Official Receiver - an officer of the bankruptcy court
an insolvency practitioner - an authorised debt specialist
To begin with, the Official Receiver usually acts as your trustee.


Your bank accounts

You must give the Official Receiver your bank cards, cheque books and credit cards. Your accounts will be frozen but your trustee may release: any money you need urgently - for example, to buy food
your partner’s share of any money in a joint account
It’s up to your bank if they allow you to continue using the accounts.

Although this MAY happen, it doesn't mean that it will and this explanation on a government web site is not very accurate and is simply the worst case scenario. This "disinformation" is itself enough to prevent people from even thinking about becoming BR, which I can only assume is what the aim is.

Lets face it, sleepless nights, strong suicidal thoughts and anxiety whenever the phone rings are not conducive to a healthy life. For me personally and after trying several other options, the simple fact of the matter was that BR was the best option. Uncomfortable it may be, but so was life before BR.

greek-dave

Depth_Charge wrote: »

Hi

Interesting thread:)

Useful B/R expenditure allowance IPA / IPO info below from Citizens Advice


DC

Other expenditure items that could be considered :
Clothing
Holidays ???
Hairdressers
Extra curricular activities for children
After school clubs
Pets Horses!!!

I’ve been told that I have to make payments under an IPA because I’ve been given a ‘nil tax’ code. What does this mean?

There will be extra money in your pay because of the nil tax code. This additional income can form the basis of an IPA or IPO where it provides you with surplus income. In these circumstances a nil tax (or NT) IPA or IPO based on this additional income may be the only amount you have to pay. Once your tax code changes at the end of the tax year, the IPA or IPO will stop. If you are paying an IPA or IPO because you have other surplus income, the monthly amount paid under the IPA or IPO will reduce when your tax code changes.

Strange, my IP told me that they won't look at a IPO/IPA for the first year, so this NT tax status is irrelevant.

More inaccurate information from an official web site..