Income and expenditure

Sharp_claws

I have been referred to Money Wellness by Step change to look at DRO or bankruptcy. I am in a deficit on the income and expenditure but when going through the expenditure it is coming out I am in a surplus with Money Wellness. They said it is because of my childcare costs. My average childcare cost is £400. Some months when I need to pay out of school club it can be £510, the £400 is to take into consideration the fluctuations.

However Money Wellness say my child care is £116 because I get 85% back through my UC. I have tried to explain that 85% back is what is included in my UC payment which averages £1,542. My net salary is £1,345 and monthly child benefit is £258. Total £3,145

When I get paid I pay out £400-500 childcare. I don't pay £116. Does this sound like they have got it wrong or am I being thick?

So when I pay £400 childcare my outgoings total £3,248 so a deficit of £103. They are saying it is £116 which would give a surplus of £181. They said if I put down the £400 I'd be paying for childcare twice! I just don't understand it. They said to forget what Step Change said as they work out things differently. 

Can anyone shed any light on this for me?

I will post again with my statement of affairs tomorrow.

Thank you

Sharp_claws

 I have managed to do a copy and paste from the budget they sent. Current advice from money wellness is IVA.

Total Income 3,145.00

Total outgoings 3,056.00

Salary or wages (take home) 1,345.00

Universal Credit 1,542.00

Child Benefit 258.00

Total benefits and tax credits per month £1,800.00

Monthly Outgoings:  Single parent of 3 children ages 3, 7 and 13

Rent 850.00
Council Tax 108

TV licence 14.00

Gas

Electricity 158.00

Water supply 28.00

Childcare costs 116.00****** THIS is actually £400-£500 out of my income.

Prescriptions and medicines 12.00

Total care and health costs per month 128.00

Public transport (e.g. work, school, shopping) 5.00

Car insurance 66.00

Road tax 22.00

MOT and ongoing maintenance 80.00

Fuel, parking and toll road charges 248.00

School uniform 28.00

After-school clubs and school trips 30.00

Buildings and contents insurance 9.00

Union fees 16.00

Home phone, internet, TV package

(incuding film subscriptions) 73.00

Hobbies, leisure or sport (e.g. socialising,

eating out, outings, clubs, leisure courses) 174.00

Gifts (e.g. birthdays, festivals, charity donations) 30.00

Pocket money 20.00

Newspapers, magazines, stationary and postage 4.00

Groceries (e.g. food, pet food,

non-alcoholic drinks, cleaning) 580.00

Nappies and baby items 43.00

School meals and meals at work 85.00

Laundry and dry cleaning 15.00

Smoking products 20.00

Vet bills & pet insurance 52.00

Clothing and footwear 70.00

Hairdressing 40.00

Toiletries 30.00

Total costs per month 3,056
If I put down the actual figure of £400 for child care 3340

stu12345_2

your car servicing ,mot, fuel and hobbies are above the acceptable limits in the standard financial statement  for starters, that's not to say your totals are, just these parts are., even tho car MOT, fuel are fixed costs, but leisure is a variable cost.£200 is max for fuel,£35 is max for MOT and servicing, hobbies, recreation, are £ 25- 30 per adult approx and less per child


it does make sense where you state you pay out £400 for child care then your UC gives you an amount to help cover that, I see your point, money wellness don't.
it would be a different answer if you never paid £400 upfront , which I think that is money wellness way of thinking?

if you put down £3340 , then you are in a negative budget, how will you live?

if you rent an IVA is unsuitable.
what is your total debt size.?? that is important 

money wellness are known to push for IVas cos they make a lot in commission 

here are the limits for spending that I have researched, they can be broken down again  into limits for hobbies, fuel, car MOT, servicing., here are variable costs upper limits.

let's concentrate on the size of your debts and how you will manage your negative budget first.

Sharp_claws

Thank you for this.
My total debt is £27k
When doing the budget Money Wellness pushed those figures for servicing, MOT and hobbies up as they said what I had put was very basic.
 Fuel I spend average £160-180. Last MOT was £180 and so far since December 2023 I have spent £620 in repairs and tyres. Not serviced the car yet but is due soon, garage estimate £250.
Hobbies are £52 for kids swimming lessons and a council run gym membership.

The car is worth £1400 according to the check they ran. I don't own a home and have no savings. Currently my dad has been helping me out financially.

To make things more complicated I have a salary sacrifice of £99 from my gross salary. This was for household electronic goods I needed after my partner left, taking a lot of stuff with him. I didn't even have a frying pan or tin opener.

My tax code changed in April too as I had underpaid on tax last year. That has dropped my net salary by around £30 until next April.

stu12345_2

 DO NOT sign anything with moneywellnes just yet!!
one off car repairs isn't a norm, and  you won't be allowed gym membership,
do you need car for work, can you get bus or train

think of not what money wellness think and say, but think the way the government insolvency practitioner will think.imo

cos the practitioner can refuse these inflated upper costs

money wellness pushing your expenses above acceptable limits is dodgy for starters , they know the insolvency  limits and they should not be doing that 

are they doing it so they can sell you an IVA or what?

you need a min of £100 excess a month to get an IVA.



using your dad isn't a guaranteed income for the length of an insolvency solution( which could be 5 years long repayments)

, they normally want to see if you are waiting for more benefits to be worked out, or using a food bank, if you apply in a negative budget before they approve anything 

i went to money wellness last month for a DRO they refused, I have a thread about it. they were rude, bossy and unsympathetic., even though we fitted the criteria !!

and we spending reasonable amounts, £50 for leisure, no gym, £30 for car, even tho it needs new timing belt. , they refused cos they said folk that claim UC are expected to work 35 hours a week which would cancel our dro, we said we both work part time and above the administrative earnings threshold, hence we are not required to job seek full-time hours.we can remain on our part time hours,they couldn't care less about that, they did not know the UC rules at all.

their solution was bankruptcy or £1 a month repayments!!!!

we rent, own old car and no assets , just like you do.

then they rattled on about not to  inflate expenses in order to get a dro!! as it's an offence, and possibly  criminal,even though our overheads were 100% accurate 

I am now using Christians against poverty,( they can do an  insolvency  solution for you) they are working out a solution for wife and I., it is over 3 visits, they come to your home for hours if needed and see all your paperwork and help you fill in things, or you visit them at a local community  centre or one of their churches and do it there, they are lovely and highly sympathetic 

Sharp_claws

Thank you for that, this is what is was thinking in regard to it should be what an OR would say. 
I am thinking of waiting until January/February once my salary sacrifice is done and seeing where I am at then. My childcare costs and school meals will be changing in September as my middle child moves into year 3 and youngest starts nursey. I will be entitled to the 30 hours free childcare but will still need wrap around care.

That is crazy what they are saying about Universal Credit. It seems maybe they aren't interpretating it correctly. I work 22.5 hours and it has never been mentioned I need to increase. An increase will just double the childcare costs, not to mention the impact on my mental health which I have suffered with for 20 years. I am currently having active treatment and they did seem sympathetic to this. However once they mentioned IVA they got very pushy saying they will send paperwork over straight away for me to sign! I said I'd like to take some time to think and they asked what it is I need to think about which I found irritating.

Anyhow, I think I'm best carefully watching my budget the next few months and seeing exactly what I am spending and where. Things have been a bit sporadic. I have made spaces in my bank account for all areas of spending, to put money into when I get paid. Hopefully that will help see thing clearer.

Thank you for the help!

Sharp_claws

Oh and yes I need a car for work, I live rural so would need to drive just to get a train which is 11 miles away. I have to drop the kids at breakfast club, child minder and then straight to work 15 miles away on a rural route. I have looked for local NHS work but there is nothing in my pay grade. Thankfully I have been in the NHS 24 years and have a pension with them. I think to take a pay cut to work locally would just even out cost wise if I ditched the car. 
There is talk of my service being able to do some work from home once some changes to the service come in next year, however I would need to do one or two days in the office still. But also will be providing on call service then too so it is up in the air.

stu12345_2

as you work 22.5 hrs , and probably above min wage,you are above the applicable earnings threshold.
the gov sets them at min wage multipled by hours to see what group you go into, eg non job seeking requirement or active job seeker requirement.
 it's £892 and £1437 for single or couples, you have to earn this gross  monthly to be exempt from job seeking rule.
the 35 HR rule is the basic declaration you make when you claim UC. but like I said once you go above the AET, you may not have to job seek at all, which you dont have to.

money wellness don't care or interprate the rules wrongly.
what is your situation with your creditors, have they defaulted your accounts, are they pushing heavily on you, have you shown them an income expenditure sheet 

imo do not SIGN anything with money wellness 
but if it's a DRO or IVA you can only do it via the likes of them or similar organisations  and debt charities.

but if it's bankruptcy, you can do that on your own, you don't need their permission. you do the online application yourself.

usually if you can clear your debts in. a dmp repayment plan within say 6 years or less, that's recommended, but any longer, then it's a DRO, IVA or Bankruptcy that's advised

can I ask , have you checked your debts are legally enforceable, you do this by writing to creditors and asking for a copy of your credit agreement with them. many times they don't have it anymore, which means the debt can never be legally enforced and you simply stop paying it.

Sharp_claws

I have 3 defaults out of 10 creditors. I have been on a DMP  with Stepchange for 3 years. My current debt free date is March 2060. Thankfully I haven't had any heavy pushing but over half the debts have been passed over to collections agencies. Money wellness said IVA as it will shorten the term to 5 years. I am sceptical though as this has never been mentioned by step change. They have said either continue DMP or go DRO or B.

stu12345_2

nobody should advise a 30 years long DMP. not even money wellness.
 Bankruptcy or if you fit into criteria a DRO imo. and as you need car for work you keep it in bankruptcy,but you need to check your landlord if you can still rent if made bankrupt, some refuse.

if you debts are sold onto collection agencies, that is sold on its highly likely the credit agreement can't be found!

you should write  to all your creditors, either the original creditor or the debt collection agency and ask for a copy of your credit agreements, this is a must do imo 

read this how too many folk are recommended wrongly an IVA

alarm bells should be going off!!!!

https://amestaylor.medium.com/artificially-increased-living-expenses-to-get-an-individual-voluntary-arrangement-iva-dd618f5d77f3

Sharp_claws

I have checked with my landlord and he is happy with me staying in the property and can't see a reason why not as my rent is always paid on time and no arrears. I am very lucky that they are very supportive, he even came and did the garden for me last week which was a big job. They let me have pets and took me on as a single parent with a DMP.

Thank you for the pointers. MW tried to call today but I declined it. I'll hang on a while until I get straight with childcare etc.