Household surplus income question

Skintnorthernmonkey

It would actually be on your partners interest for the household expenses to be split 50/50, not 2/3 1/3. This would make an IPA much less likely.

Has the OR indicated that an IPA will be forthcoming?

rufusthedoofus

The OR said that he would look at our joint surplus income to divide up to see what surplus there was. He then said he would send an income/expenditure form for us to put all expenses on, and encouraged me to add my daughters Uni expenses so yes, i think thats the way he is going

TheGardener

rufusthedoofus wrote: »

The OR said that he would look at our joint surplus income to divide up to see what surplus there was. He then said he would send an income/expenditure form for us to put all expenses on, and encouraged me to add my daughters Uni expenses so yes, i think thats the way he is going

Well politely point out that you are not going BR - your finances are in excellent order and you are happy to pay your fair share of the household expenditure but that's it - the rest is yours to spend as you see fit. After all, if your partner was living on his own...he'd have far greater domestic expenses and probably no IPA. This OR seems to me to be pushing it a bit but the OR's job is to get as much for the creditors (and the IS fees) as they can so you need to be prepared to politely stand your ground.
At the end of the day this is your partners responsibility and he will have to take responsibility.

rufusthedoofus

Ok, so confused again... just got this response from Stepchange debt counsellor on here...

"Firstly, I can empathise with this situation and completely understand where you're coming from, and your frustration at this. From what you have said though it sounds as though this is the process that I understand will happen.

It's important to be clear that you're absolutely not being made to pay your partner's debts. What the OR is establishing by doing a joint budget is that your partner is paying only a fair share of reasonable household bills and living costs, and not more than that. This is because have to make sure that creditors are not being disadvantaged.

For example, if you earned exactly the same wages and there was £400/month left over in the budget after essential bills and reasonable living costs, they'd ask your partner to pay £200 into the bankruptcy and you could keep your £200 and do what you like with it; they wouldn't ask for the whole £400. If you earned double the wages of your partner, they'd expect you to pay two thirds of the budget costs, and so on.

To be frank, now that he has applied for bankruptcy and this process has started, it's best just to go along with it, because one way or another, the OR will get what they request. It is based on set guidelines.

I appreciate this may not be what you want to hear, but I hope it provides a bit of clarity.

Allen

fatbelly

rufusthedoofus wrote: »

I appreciate this may not be what you want to hear, but I hope it provides a bit of clarity.

Allen

Doesn't really do that, does it?

PrettyKittyKat

The debt counsellor is reiterating what others have said. It is to make sure your partner is paying the correct proportion of the household expenses.

TheGardener

I personally would be very unhappy with the response from Stepchange. Your finances are not the OR's concern, the cost of household expenditure is easily determined and the % split is simple maths - as is the partners surplus. Once you have paid your share of household expenses - the remainder of your income is not part of the 'pot' at all - its yours to spend as you see fit and don't let anyone tell you otherwise.

TheGardener

rufusthedoofus wrote: »

...
To be frank, now that he has applied for bankruptcy and this process has started, it's best just to go along with it, because one way or another, the OR will get what they request. It is based on set guidelines.

I appreciate this may not be what you want to hear, but I hope it provides a bit of clarity.

Allen

I would suggest the wording of this particular 'advice' is far from reassuring (or clear) and not the language or tone I would expect from a professional debt advisor. Very disappointing.

debt_doctor

A couple of years ago the Insolvency Service adopted the Standard Financial Statement (SFS) to calculate surplus monies for an IPA. In many ways this was better for the bankrupt as the expenditure allowances were greater than the formerly used Household Expenditure Survey.

But rightly or wrongly, the IS are asking for full income of bankrupt and non bankrupt partner - putting the full family expense allowances (if claimed) including children etc in to the SFS - then if it shows a surplus, they pro rata the surplus to get the bankrupts expected IPA payment.

In addition to this, the Technical manual (public version) has not been updated for more than 2 years.

I completely agree with the earlier quote about a non bankrupt partner not wanting to disclose their income - and have used that argument a couple of times over the years.

It is also a very valid point that a non bankrupt has to be able to pay their own contractual payments to any commitments they may have (which would be in the SFS) - the issue comes from pure surplus income - If the non bankrupt has a large genuinely surplus income it will influence the couples total surplus income and therefore the pro rata calculation on the surplus will make the bankrupts IPA larger.

Is this approach right? It's certainly different. Ultimately a court can decide.

I am no fan of Stepchange.

DD

TheGardener

Perhaps the most pragmatic way to approach this now is for your partner to post an SOA on here so we can have a look and offer suggestions to ensure he is making the most of the SFS?