Income Vs Expenses

anonn_38

Hi All

I'm in the final stages of applying for a debt relief order, my SFS shows

Income £1669
Outgoings £1841
Total -£145

The income was an average and it's been a lot lower lately, around £1540.

I'm going to ask at my next call but I hope to get my income up to the £1841 mark so that I can meet my monthly outgoings reasonably without cutting back too much.

Am I correct in thinking that I can earn £1841 to 'balance the books' and it will be ok even if I'm not earning that now?

stu12345_2

what is your contractual wage eg number of hours and hourly rate per month add up to, your debt charity that is applying for your debt relief order will look at your last 3 wage slips, you can explain that if they are low cos of no  overtime.
but tell them what the min guaranteed wage is per month. and they should run on that amount if eg overtime is not guaranteed 

they will only accept a higher wage if it's guaranteed overtime 

can you earn £1841 every month for 12 months? if not then they will use your min guaranteed amount or last 3 months if last 3 months is your regular wage, is the £1669 the norm or is that come from overtime included

they are looking for a figure that you regularly get per month, to work out your regular monthly amount will be for the next 12 months, eg the length of your DRO

they won't accept a verbal amount you think you will earn, they need to see it in writing eg wage slips or a contract if employment with your hourly rate and fixed hours .

what benefits do you get, they won't put forward your debt relief order application if you are in a negative budget even if you include your wages and benefits cos it will be unsustainable.to live on.

you could I suppose ask for a reassessment of your expenses, especially your variable ones, clothes, food, hobbies, gifts and cut back , but your fixed expenses won't change eg rent  , council tax, road tax, water, elec, gas


has the debt charity done a final income expenditure fact find with you, have you gave them your last 3 wage slips, or your contractual min wage and copies of regular benefits you get, eg last 3 months statements of benefits you get

as a DRO is a legal form of insolvency, the figures you give must be accurate and truthful. if I was you I'd give them the norm regular amount you can guarantee to earn per month and cut back on my variable expenses to balance the books, that is if you can't guarantee you will earn £1841 every month for the next 12 months

stu12345_2

in summary what is your norm.wage without overtime if overtime is not guaranteed 
1540, 1669 or 1841

cos the debt charity will use your norm over the last 3 months if overtime is not guaranteed , 

I assume you got the 1669 figure based on your last say 12 months wages?

anonn_38

The £1669 is my average that they have put in. I gave an example of £1540 was last month 

My expenses were worked out at £1841 per month so I am in a negative budget.

What I'm asking is that if I managed to get my income up to the £1841 so that I can live 'comfortably' and leave me with a surplus/deficit of £0, is that ok? I'd still have less than £75 per month spare to qualify for a DRO.

It might be impossible to get to that amount, my contracted minimum is £1200, I'm just more curious about how it works when your initial budget is a negative.

anonn_38

Just to clarify - I'm not asking about changing the figures I've given them, they're accurate and based on my payslips which they have, I'm asking after the DRO is granted can I work on improving my actual income over the next year to meet my expenses rather than cutting back, or a combination of both to not leave my in a negative 

stu12345_2

your dro application will not be approved by the debt  charity if you will be in a negative budget
 unless you can show how you will live such as awaiting a benefit award.

 you have to show it will  balance to zero and below the £75 excess a month

if it shows negative £145 , then they won't go ahead with your application unless you can show you are awaiting eg  benefit award  of at least £145

 eg, if they approved it in a negative budget without proof of a guaranteed extra income/ benefit due to start at the start of the DRO , then you will simply get deeper and deeper into debt, that is why your application will be rejected and not be forwarded 

like I said expect a rejection letter soon from the debt charity, and then ask for a re determination of a new expenses budget where you shave off £145 from your variable expenses.
but from personal experience they don't take kindly to folks making everything fit in order to get a DRO, eg giving out your expenses, then fiddling with them to fit., beware!!

stu12345_2

what I would have done at the start of the application is do a budget at home before you present your figures to the debt charity and see if I fit the criteria.

you now have a dilemma if a possible dro application rejection and asking for a reassessment to be done in order to fit before a new application goes ahead or not.
some debt charities will not let you play around to get it to fit.

if it is rejected, then you will have to state your wages are correct, but you over estimated your variable expenses and could you please do a reassessment on lower more accurate and realistic variable expenses

let me know how you got on please 

( and I am in the midst of a debt situation  which I think will be a DRO application, I'm in a negative budget but awaiting confirmation of a benefit that will take me to the zero to £75 limit, it will only be submitted by the debt charity once benefit  confirmation is granted, which is around 2 months away( long story) so my DRO application is on hold and not submitted yet)