Avoiding an IPA - expenditure query.

youngbuck2

So, I'm going to be applying for BR soon (would have been a few weeks ago but a few money issues got in the way). I REALLY want to avoid having to pay an IPA/IPO as I don't want to be financially restricted for 3 years and would rather have a fresh start when my BR is discharged not worrying about paying surplus money.

I am currently living with parents and unemployed. At the moment I do not pay any rent to them or pay for any food etc but they have said once I start working I will need to pay them £350 rent (including bills) and pay for my own food.

Once I have gone BR, I will be getting a part time job. Part time because I am studying part time for a degree at the same time.

My only monthly expenditure will be around £580 in total.

So what's the best advice here in terms of getting a job to avoid IPA?

Is the OR flexible on what your expenditure is?

What about things like dentist appointments - what if I need treatment? Can I just say I want to "put aside" £15 a month for dental treatments just incase?

Can I say I spend £20 a month on clothes etc?

Is there a list of "acceptable" expenditure that the OR won't question?

I don't want an IPA, and would be over-cautious and find a job that doesn't pay what I need it to just in case.

TheGardener

youngbuck2 wrote: »

So, I'm going to be applying for BR soon (would have been a few weeks ago but a few money issues got in the way). I REALLY want to avoid having to pay an IPA/IPO

Don't we all!!! but try not to sound quite so like you are trying to dodge your responsibilities. BR is not to be taken lightly - the consequences can last for many years - we assume you have already taken professional debt advice via National Debtline, CAB etc?

youngbuck2 wrote: »

So what's the best advice here in terms of getting a job to avoid IPA?

The forum can share experiences on ensuring your expenditure on your SOA is comprehensive - We don't normally discuss 'avoidance' of legal responsibilities ... There are no 'allowances' as such but the OR does have a set of guidelines to follow. There are many examples of SOA's on these boards you can look at to get a feel for the general amounts.

youngbuck2 wrote: »

Can I just say I want to "put aside" £15 a month for dental treatments just incase?

I wouldn't quite put it like that but an amount can be allowed for dental/optical (and medical if there is evidenced need) Otherwise you are allowed to have a small 'emergency fund' and yes, you can have a small amount for clothes.

The OR will have general expectations around everyday living costs but don't be naïve and think they won't question your costs, particularly if they involve renting/lodging with family - it is for you to demonstrate/evidence need and for the OR to agree or otherwise.

mwarby

Rent - in the absence of a established rental agreement the OR will want to see how the figure was arrived at, simply arranging for rent to be high to avoid an IPA wont go down well

Job - as low paid as poss if you want to avoid an IPA, but you need to consider your future, 3 years will go by quickly, maybe better to come out with best job you could have got, than be stuck in a dead end one.

Expenditure - there is some flexability there, you draw up a budget the OR either agrees or disallows reduces some areas.

You budget for an average month, building up savings for larger but irregular stuff (you might put money away for medical expenses). It's your responsibility to divide up and spend the amounts as you see fit (nobody is going to ask for dental bills, but also if you spend it elsewhere and later need it, you cam't get it again)

There are lists of expenditure categories, the stepchange site i belive has a budgeting tool. There are trigger limits which would cause the OR to justify the expense, but these aren't published to prevent abuse

I suggest you take a look at the SOA tool listed in https://forums.moneysavingexpert.com/discussion/107280 and maybe post your SOA up, we can then point out what you may have missed and areas that are likely to be queried\disallowed

youngbuck2

TheGardener - Even though an IPA is legally binding, it doesn't mean I can't sensibly plan to avoid one if possible. I have a bit of flexibility at the moment. Either way (whether I get an IPA or not) I won't have any spare cash so it makes sense to sensibly plan not to go down that route.

In terms of rent - I'm not paying any at the moment but my parents have said they want me to pay them to live there which is fair enough when I start work. They have said around £350 including bills which I think is a fair amount.

Does £180 sound a reasonable amount for me to pay for food per month that an OR would be happy with? Again my parents are paying for things right now, but will expect me to pay for myself once I'm working.

I guess a lot of this is irrelevant as I will need a part time job anyway as I will be studying for a degree so can't up my income to a full time job anyway. The only way I could up my income would be to get a better paid part-time job but every part time job I've looked at is minimum wage or close to it.

mwarby

i think £180 for food is reasonable imho(I got similar amount in IVA, but I live alone). You can also claim around £35 for meals at work, maybe this could apply to meals while studying ?

TheGardener

I think mwarby is right - do an SOA using the link provided and filling it in will give you some idea of how it might pan out. I suspect that unless you are very well paid, then part time work is not going to take you into IPA territory but as also said - the OR will want hard evidence of an agreement between you and your parents, they are always likely to look hard at family arrangements.
Good luck with the degree - I would give my right arm to be able to work part-time and study but life/family responsibilities are such that it can never be.

youngbuck2

TheGardener wrote: »

I think mwarby is right - do an SOA using the link provided and filling it in will give you some idea of how it might pan out. I suspect that unless you are very well paid, then part time work is not going to take you into IPA territory but as also said - the OR will want hard evidence of an agreement between you and your parents, they are always likely to look hard at family arrangements.
Good luck with the degree - I would give my right arm to be able to work part-time and study but life/family responsibilities are such that it can never be.

Yes I am in a fortunate position but I lost my previous job so have to start again effectively.

When you see the OR will want 'hard evidence' of an agreement between me and my parents - what exactly will he be looking for? Does he expect to see a written contract or something? It's a bit formal to write something like that between my parents and I, and I don't think we'd even know where to start beyond writing "pay us £350 a month" ?

It's all theoretical right now - I don't know how much certain things will costs (like travel to work etc). I am still unemployed and by the time the OR calls I probably still will be so will have to explain my situation then.

TheGardener

If you are not currently paying you have no 'evidence' - if you are paying then there should be evidence of regular payments being made from your bank account to your parents (cash deals won't cut it I suspect)
In a way its all hypothetical - when you go BR the OR will examine your circumstances are they are on the day. As a BR it is then down to you to inform the OR of any change in circumstances within 21 days of the change happening.
You don't need to tell the OR (because they wont be interested) about the 'future' unless it is certain and imminent.

mwarby

on top of this, they may look at typical rents(many rooms up on say gumtree) and verify that the rent you are paying is normal, eg £1000 for a room in an area with rooms at £200-300 probably wouldn't fly

I'm not sure but I suspect the OR wouldn't be overly happy about moving to more expensive accomodation unnessecarily.

youngbuck2

mwarby wrote: »

on top of this, they may look at typical rents(many rooms up on say gumtree) and verify that the rent you are paying is normal, eg £1000 for a room in an area with rooms at £200-300 probably wouldn't fly

I'm not sure but I suspect the OR wouldn't be overly happy about moving to more expensive accomodation unnessecarily.

My parents want me to pay £350 a month including bills which is about the going rate in this area.

youngbuck2

TheGardener wrote: »

If you are not currently paying you have no 'evidence' - if you are paying then there should be evidence of regular payments being made from your bank account to your parents (cash deals won't cut it I suspect)
In a way its all hypothetical - when you go BR the OR will examine your circumstances are they are on the day. As a BR it is then down to you to inform the OR of any change in circumstances within 21 days of the change happening.
You don't need to tell the OR (because they wont be interested) about the 'future' unless it is certain and imminent.

My county court have said that the OR will make contact within 48 hours of me going bankrupt so this time next week potentially. I definately won't have any income by then.

So from what you are saying, wait until I get a part time job and then start paying the monthly rent (as I anticipated would happen) and then inform the OR? That way I will have proof that I am making those payments as it will show on my bank statement that I have paid £350 to my parents?

Last question...

Can the OR tell me/my parents (i.e. my 'landlords' - even though we have no contract) to reduce my rent payment to pay an IPA? I.e. if I am paying £350 which my parents have agreed, can the OR tell me/my parents to reduce my rent to £300 and pay £50 to an IPA?