Means testing

croakle

Hello

I applied and was granted bankruptcy in June.  Buy to let went wrong and I couldn't cover the costs, or sell (because of the freeholder).  I am autistic and tend to put things off and avoid dealing with things anyway.  I work full time and live alone in rented accommodation.  I was allowed to keep my car.  I am going to be means tested.  I would be grateful for any advice about how to approach the means test, and what costs are reasonable or permitted, etc.  For example I can say I spend £100 a week on food, but is it ok to say I spend the same going to the pub?  The OR lady said any payments I will eventually make (for three years) have to be affordable for me.

Thank you

stu12345_2

you will be allowed  fixed costs, rent , gas, road tax, car insurance, petrol, mot, council  tax, contents insurance , bus fares, taxi, parking, train fares, TV licence, broadband 
servicing, life insurance,

which you can prove via weekly or monthly or even annual bills.
 these tend to fixed costs they have to accept 

variable  expenses such as leisure, clothes, haircuts, food, toiletries etc I think even a very small emergency fund.£20( for emergency repairs etc)
do your breakdown per category, eg don't just say food, say groceries, take aways, toiletries., personal costs( deodorant, shampoo,razors)


obviously it's hard to prove the variable ones, so they won't check, but if you stay within the limits I suggest and the max limits in the attachment I posted , you will be fine.

nobody is going to come to Tesco and watch you spend lol.

leisure is fair at £30 a month, clothes at £25.
pub comes under leisure, don't say pub.
communication includes mobiles, TV , internet 

obviously if pub is your leisure and it's higher than say £25 s month, then simply "up" your food bill, so you can take some of that allowance and use it at pub.



do you smoke or vape.

here is a max limit I found online that they will use

the point is they take 100% of everything above £20 a month left over for 3 years at the time of the means test calculation.

the object here is to make sure you have between £0 and £20 left over at end of month to avoid a 3 year payment arrangement, with good planning you can do it to match!!!

sourcrates

Means tested is too strong a word, its simply a telephone conversation with the OR`s office, to determine your budget.

I suggest you have this all worked out beforehand, so as not to put you on the spot so to speak.

You should aim to have no more than £20 left over as your disposable income, otherwise an IPA will be granted.

croakle

Hello both and thanks so much for your replies.  stu that information is so useful.  I had a Teams consultation with the Insolvency Service who were great and very understanding, but now I've been passed over to an insolvency practitioner who has emailed me with a means testing form.

stu12345_2

usually within 3 months of going bankrupt they do a means test to see if you can afford anything to your creditors over next 3 years.
if they show you are below £20 a month, then you've escaped and just ride your 12 months bankruptcy  out

croakle

The insolvency Service lady was very helpful and stressed that payments need to be affordable over three years which I took to mean that I should make allowances for inflation on my current costs.

stu12345_2

I. read that the means test allowances tend to be more generous than say on a DRO or an IVA. but if you get an income order , you can ask for it to be reassessed during the 3 years if your income goes down or your expenses go up

sourcrates

Always overestimate your costs, if anything appears to be too high, they will mention it, and ask you to alter it.

Most of all use common sense when filling it in.

croakle

Thank you both very much for your advice.