Helping my brother with his debt problems

Toffeman

Hi

I am trying to help out my brother with his debt issues. He currently owes in the region of 25k spread out across loans, credit card debts and a few HP purchases.

My brother is 33 years of age and has had most of these debts from his late teens to early twenties. When they totaled nearer 40k.

He lives alone in a housing association flat where he has been since 1999.

My brother wants to go Bankrupt and my question revolves around how much money would be taken off him for an IPA.

After looking at all his incomings and outgoings he has quite alot of disposable income that being a single man he currently spends socialising.

He has spoken to a few people who have also gone through bankruptcy and he advises me that they have all told him to go for it and he is convinced that he doesn't think that the Official Receiver would leave him with no spare money.

My concern is that if he goes bankrupt he will be in a much worse position than he is now both physically and mentally. He sees the bankruptcy as a fresh start which I completely understand but I'm not sure it will be so easy for him.

Here is where I would be grateful for any advice. If for example if he had £200 left over a month after accounting for all of his allowable expenditures would you expect the Official Receiver to take all of the £200 for an IPA or do they judge each case individually?

I would be grateful to hear from others who have gone through this to understand how much they have been left with on paper each month.

Many thanks in advance.

debt_doctor

Hi,
These days the IS will look to take all of the surplus. If he were my client I wouldn't let that happen and never have. Would have to be strong though.
Best way to get a view of what might be reasonable expenditure is to pop up his SOA on here to look at.
DD

longtermplanner

They judge each case individually.

If he has £200 a month left over, then he can't repay 40k. So he has to go bankrupt or for an IVA. An IVA isn't likely to be approved for much less than £200 a month for that amount of debt and it would be for 5 years.

Bankruptcy sounds like the obvious answer. If he is broke for 3 years then that is better than being broke for 5. He will survive

Toffeman

debt_doctor wrote: »

Hi,
These days the IS will look to take all of the surplus. If he were my client I wouldn't let that happen and never have. Would have to be strong though.
Best way to get a view of what might be reasonable expenditure is to pop up his SOA on here to look at.
DD

Please see the below

Incomings after tax per month 1,400

Outgoings Per month
Rent 435
Housekeeping (including food and cleaning) 260
Gas, electricity, other heating 88
Water 21
Telephone Charges 60
Travelling to and from work 0
Clothing 50
Maintenance Payments and Fines 0
Council Tax 82
Other essential payments 163
Contents insurance 13
Sky 47
Holidays 40
Haircuts 20
Dentist 10
Opticians 20
TV License 13

Total 1,159.00

Leftover 241.00

As far as I know at the moment the leftover money currently goes on making minimum payments to keep his creditors off his back and for socialising. I know that if he was left no money for going out once or twice a week being the way he is he would find it extremely difficult hence why I wondered what they would take from him for an IPA.

Do these amounts seem reasonable? He wont be allowed money for Sky TV right?

TheGardener

If he switched to an all in one TV/Internet/phone package it could cost around £40-50 and my OR was fine with that.
No travel expenses at all?

luvchocolate

Hi what are the .....other essential payments £163??

alastairq

Hi..be aware, whilst allowances for 'socialising' are not condoned [which is what you seem to be asking?]...there is no compulsion, on the part of the OR, fora BR to actually spend monies allocated to other allowances, on those particular items.

In other words, cash for a night out would need to come from...for example, the food allowance?

Or, haircut allowance?

Or even, the allowable amount put aside for a holiday?

BAnkruptcy allows a fresh start, but to do so may mean quantum changes in lifestyle.

'HAving one's cake, & eating it'' is difficult, but not entirely impossible.

Toffeman

My brother currently does not use his landline and just uses his mobile for all his calls and internet. He also doesn't have a computer.

He doesn't have any travel costs as he gets picked up to go to work.

Toffeman

luvchocolate wrote: »

Hi what are the .....other essential payments £163??

I didn't explain it very clearly the essential payments is the total of all the items below.

Contents insurance 13
Sky 47
Holidays 40
Haircuts 20
Dentist 10
Opticians 20
TV License 13

ALIBOBSY

Toffeman wrote: »

My brother currently does not use his landline and just uses his mobile for all his calls and internet. He also doesn't have a computer.

He doesn't have any travel costs as he gets picked up to go to work.

£60 still sounds like a lot for this, can't he get an all in one package a bit cheaper? Of course if he recently took up a contract with a new phone then he is stuck.

The food bill seems high for a single person, but not sure how much they would let him have for that.

I would go with the OP that his situation doesn't seem bad enough to go bankrupt. The brother just seems to want to carry on with his current lifestyle and will go bankrupt and expect to be able to carry on spending like he has been, doesn't sound like he has hit the bottom and had his lightbulb moment yet.

Good Luck

Ali x

woodformoretrees

I think maybe a £20 a month haircut budget seems to be pushing it for a single person.

It has to be said though that your brother has done well paying back all the money that he has over the years. I wonder if he's maybe seeing bankruptcy as a full stop on the whole thing from the moment the paperwork is signed. If that's the case then he's better off not going down that road.