Income/expenses bankruptcy

jellycat11

Hello. My bankruptcy was approved in March 2024. I filled out the required NTB2, TNDIS and DPADA forms at the outset and after a telephone conversation with the IPA assessor, it was determined I would not have to sign into an IPA. 

7 months later, the insolvency service have contacted me wanting me to sign electronic versions of those forms I mentioned above, as they are unable to locate any signed forms om their system. 

I haven't signed the electronic forms yet as I need to update my income/expenses beforehand as I missed some expenses on my original application. My wages have also increased slightly. 

I was just wondering, what the reasonable allowances are for food etc. will they accept £400 a month for food for a single person? and will they allow expenses for smoking/vaping? and if so, how much?  and any other maximum allowances you know of, please let me know.

Many thanks 

MattMattMattUK

jellycat11 said:

Hello. My bankruptcy was approved in March 2024. I filled out the required NTB2, TNDIS and DPADA forms at the outset and after a telephone conversation with the IPA assessor, it was determined I would not have to sign into an IPA. 

7 months later, the insolvency service have contacted me wanting me to sign electronic versions of those forms I mentioned above, as they are unable to locate any signed forms om their system. 

I haven't signed the electronic forms yet as I need to update my income/expenses beforehand as I missed some expenses on my original application. My wages have also increased slightly. 

I was just wondering, what the reasonable allowances are for food etc. will they accept £400 a month for food for a single person? and will they allow expenses for smoking/vaping? and if so, how much?  and any other maximum allowances you know of, please let me know.

Many thanks 

You need to be able to realistically justify them, £400 per month, no chance, the maximum allowance is £250 per month for groceries and toiletries combined for a single person. If someone had a medical condition that specifically affected their diet (eg. coeliac) then there can be a higher amount agreed.

Nothing specifically allowable for tobacco as a rule, although it can be agreed, it needs to be reasonable, which would normally mean roll up cigarettes not pre-made and will be assessed on a case by case basis. 
9.4 Expenditure on tobacco and alcohol is allowable, although the money adviser/trustee should negotiate with debtors to try and minimise the costs and it is possible that an allowance may result in a debtor having to make some concessions in other areas of expenditure.

Other things such as clothing £40 per month, entertainment £30 per month, dental and optical £20 per month. Travel must be justified for work and essential travel etc. 

RAS

Not sure what the values are but post a SOA and folk will tell you if any are too high.

Unless the rules have changed

Medical and dental
Transport 
Modest holiday
One activity (modest)
Emergency fund (perhaps only £25)
Insurances 
Pensions

jellycat11

Thank you for your replies. 

My SOA is as follows: 

Wages after tax: 1,950

Rent: 600
Gas/Elec: 115
Council Tax: 120
Water: 35
Phone/TV/internet: 110
Food: 350 (I have IBS and gluten intolerant) 
Clothes/shoes: 100
Travel: 250
Social/leisure/hobbies: 100
Laundry: 60 (I don't have washing machine or dryer)
Smoking: 50
Gifts: 50
Toiletries: 50
Dentist: 20
Hair: 30
Household effects: 25
Emergency fund: 25

Expenses - 2,090 

negative 140

MattMattMattUK

jellycat11 said:

Thank you for your replies. 

My SOA is as follows: 

Wages after tax: 1,950

Rent: 600
Gas/Elec: 115
Council Tax: 120
Water: 35 - get a meter, should go down to £16-18
Phone/TV/internet: 110 - way to high, £10-15 for a mobile and £20 for broadband, £14.99 for a TV license
Food: 350 (I have IBS and gluten intolerant) - you need to ask, but I think this will be pushing it, you might just need to drop bread and pasta.
Clothes/shoes: 100 - too high, guidance max is £40
Travel: 250 - what is this for? You will need to justify it rather than just include a blanket figure. 
Social/leisure/hobbies: 100 - too high allowance is £30
Laundry: 60 (I don't have washing machine or dryer)
Smoking: 50 - time to give up
Gifts: 50 - not allowable
Toiletries: 50 - too high, 250 pm is for groceries and toiletries
Dentist: 20
Hair: 30 - probably too high, a £15 cut every six weeks is the guide so £10 a month.
Household effects: 25
Emergency fund: 25

Expenses - 2,090 

negative 140

That is £434 saving before even looking at the £250 travel cost. That brings you to £294 in the black.

What is the travel cost, is it all/mostly commuting?

jellycat11

Those allowances are craaaazyy. Where are they from? The 80s?!  

£250 a month for food and toiletries is just not possible for me. 

The travel expenses are taxi fees to and from laundrette, taxis to and from work (no I can’t get bus or train) and train fare to friends/family who live quite some distance. 

I really really don’t want to get signed into an IPA. I just want all this behind me and start fresh 😭

MattMattMattUK

jellycat11 said:

Those allowances are craaaazyy. Where are they from? The 80s?!  

They are the current guidelines from the Citizen's Advice, various debt charities, Insolvency Service, and various debt charities etc.. They are not "crazy", they are designed to be reasonable, considering that the person undertaking the process is getting out of paying the vast majority of their debts.

jellycat11 said:

£250 a month for food and toiletries is just not possible for me. 

I would question genuinely not possible vs not wanting to cut back. Even with the period of high inflation that we have had a single adult should be able to live on around £35-40 a week for food and £4-8 a week for toiletries (higher for women) according to published ONS data, though that means no brands, low meat consumption, no alcohol etc.
£40 for clothes is totally reasonable, Primarily and only replacing minimum as needed more than allows for that.
SIM only phone contracts with unlimited data can be had for £20, 100GB for £10.
Home broadband can be had for £20-30 depending on deals.
A TV license covers the basics but is not really needed if one avoids BBC and just uses free catchup and streaming.
Gifts and smoking are not required.
Social is to allow a very basic level, nothing more.

jellycat11 said:

The travel expenses are taxi fees to and from laundrette, taxis to and from work (no I can’t get bus or train) and train fare to friends/family who live quite some distance. 

I really really don’t want to get signed into an IPA. I just want all this behind me and start fresh 😭

It seems excessively high getting taxis everywhere. The two people I know who went through bankruptcy both walked and rode their bikes nearly everywhere. The were allowed to keep cheap cars but to keep the costs of operating down they used only when necessary. 

jellycat11 said:

I really really don’t want to get signed into an IPA. I just want all this behind me and start fresh 😭

Bankruptcy only lasts twelve months and then all your debts are written off, it is not a long period to have to cut back for, especially for the amount of money you will be let off from paying. You can fight the process and make it worse, or you can accept it for what it is and get through it.

RAS

I'm surprised.

Those on here who work/ed as bankruptcy advisors/IPs always indicate that the rules about allowances in BR are not published. They have always indicated that advising of the limits would be problematic professionally.

@MattMattMattUK, can you link to where you found the information? Thanks.

MattMattMattUK

RAS said:

I'm surprised.

Those on here who work/ed as bankruptcy advisors/IPs always indicate that the rules about allowances in BR are not published. They have always indicated that advising of the limits would be problematic professionally.

@ MattMattMattUK, can you link to where you found the information? Thanks.

I have somewhat synthesised it across multiple sources and I cannot find all the bits I located. 

https://nedcab.cabmoney.org.uk/bankruptcypoc.asp - £208 for all groceries, toiletries and cleaning. 
http://www.thedebtmen.co.uk/pre-agreed-expenditure-guidelines/ - £215
https://bankruptcyguide.co.uk/bankruptcy-living-expenses-allowances/ - £250
https://bankruptcyexpert.co.uk/articles/what-living-expenses-are-allowed-if-i-go-bankrupt £200-250

There are various articles from Citizen's Advice which talk about acceptable amounts being from £160-250, though some of those articles are five years old and the lower end of those comes from the older articles. 

I also found something from The Insolvency Service about ONS living expense data being a guideline for allowable costs. There is a lot of talk about "reasonableness", which one could argue is highly subjective, but that reasonable should be in the eyes of the average person, not the bankrupt. 

fatbelly

Everyone these days is supposed to follow Standard Financial Statement guidelines, which are updated every year, and sometimes mid-year

The SFS gives guideline figures for 

Food & housekeeping
Telecoms & leisure
Personal costs

All these things are defined. The op is within the limits for everything. 

There is a website

https://sfs.moneyadviceservice.org.uk/en/what-is-the-standard-financial-statement

But you will see that getting any useful info from it is only possible if you belong to an organisation that has signed up to it, and mis-use of the guidelines is likely to see that privilege withdrawn.

I am happy to pm the op some pointers, as I would with one of my clients. When dealing with the OR in these cases it makes sense to start high and have a discussion.

If the surplus income is less than £20 then no ipa is possible. 

It's also worth remembering (n/a in this case) that ipas are never taken from benefit income.