IPAs are changing

debt_doctor · 15 April 2017 at 5:07PM

Hi all,
The way IPAs are assessed is changing - or actually did change on the 3rd April 2017.
The Household Expenditure Survey (HES) with its guidance allowances for expenditure is no longer used. Instead, the Money Advice Services Standard Financial Statement (SFS) is now used to assess what reasonable expenditure may be.
Unlike the HES 'allowances' that are released on the Technical Manual - the SFS allowances are not released to the public and will not be published on the Technical Manual.
The SFS is the new financial statement used by the debt advice industry (CAB, National Debtline, Stepchange etc) Compared to the CFS we previously used, its allowances are far less generous, which results in higher repayments to creditors and will make eligibility for entering in to a DRO tougher.
There will, presumably, be an update on the technical manual in due course.
DD

debt_doctor · 15 April 2017 at 7:31PM

I haven't fully assessed yet as to whether this is a good thing or a bad thing for bankrupts.
It's certainly a backward step for those entering DMPs and trying to obtain DROs but we are comparing wholly different criteria with bankruptcy.

CFS V SFS - bad (DMPs / DROs)
HES v SFS - (bankruptcy) not sure at the moment.

DD

CP1306 · 19 April 2017 at 2:58PM

Will this affect those who have gone bankrupt recently, meaning can the OR go back and ask for higher payments on the IPA?

debt_doctor · 19 April 2017 at 6:16PM

CP1306 wrote: »

Will this affect those who have gone bankrupt recently, meaning can the OR go back and ask for higher payments on the IPA?

It's all new and up in the air, but my view would be that if there were a change in circumstances of a bankrupt who had an IPA under HES 'rules' then it would likely be that the new circumstances via the SFS would be used at that point.
Time will tell.

DD

pauledowa · 2 June 2017 at 10:18PM

debt_doctor wrote: »

I haven't fully assessed yet as to whether this is a good thing or a bad thing for bankrupts.
It's certainly a backward step for those entering DMPs and trying to obtain DROs but we are comparing wholly different criteria with bankruptcy.

CFS V SFS - bad (DMPs / DROs)
HES v SFS - (bankruptcy) not sure at the moment.

Have you had a chance to assess how the new rules impact bankrupts?

Depth_Charge · 2 June 2017 at 11:42PM

debt_doctor wrote: »

I haven't fully assessed yet as to whether this is a good thing or a bad thing for bankrupts.
It's certainly a backward step for those entering DMPs and trying to obtain DROs but we are comparing wholly different criteria with bankruptcy.

CFS V SFS - bad (DMPs / DROs)
HES v SFS - (bankruptcy) not sure at the moment.

DD

You have to laugh on the CFS V SFS

About as Independent & impartial as it doesn't get:)

Just my take of course

Shhh

DC

StopIt · 5 June 2017 at 11:23AM

Depth_Charge wrote: »

You have to laugh on the CFS V SFS

About as Independent & impartial as it doesn't get:)

Just my take of course

Shhh

DC

What is your take? You're not exactly saying anything in this post.

Anyway, as unfair as it will likely end up, I can see the rationale behind some of the changes.

Not publishing the allowances means that people wont be able and therefore accused of "playing to the targets" by making their I&E use their allowances based on the targets, rather than actual spending.

That said, I don't see the merits of making the allowances tougher "just because" and the merits of doing so is debatable at best.

Depth_Charge · 5 June 2017 at 3:51PM

Hi Stop it

Cheers for the question - much appreciated & I have answered best I can below

Its a long story with many of us and I cant put everything up on her

The CFS have also never been made public

I have used the CFS for years - it is / has been updated on a regular basis (upwards) - having to work with new lower figures obviously has its issues for advisers, agencies and those in debt

Making it tougher for people to access DROs or pay more into DMPs is hardly a step forward in my opinion.

Reducing the upper trigger ceiling on figures is hardly a step forward especially after all the headlines over the last 2 or three years about how we need to help and get people out of debt and the rest.

Just exactly who benefits by the above

We are supposed to be making it easier for people in debt

That's my take:)

Best Wishes

DC

ToxtethO'Grady · 6 June 2017 at 12:30AM

https://sfs.moneyadviceservice.org.uk/en/

It has been coming for a few years and there is some talk of it being rolled out to all financial institutions even debt collection agencies.

As Debt Doctor said it's effects might not be felt for a while however it does mean that all organisations will be expecting the same figures. It has a part for savings and planning ahead that has to be put in.

As with all changes it's swings and roundabouts

StopIt · 6 June 2017 at 8:08AM

Depth_Charge wrote: »

Hi Stop it

Cheers for the question - much appreciated & I have answered best I can below

Its a long story with many of us and I cant put everything up on her

The CFS have also never been made public

I have used the CFS for years - it is / has been updated on a regular basis (upwards) - having to work with new lower figures obviously has its issues for advisers, agencies and those in debt

Making it tougher for people to access DROs or pay more into DMPs is hardly a step forward in my opinion.

Reducing the upper trigger ceiling on figures is hardly a step forward especially after all the headlines over the last 2 or three years about how we need to help and get people out of debt and the rest.

Just exactly who benefits by the above

We are supposed to be making it easier for people in debt

That's my take:)

Best Wishes

DC

Thank you.

I wasn't having a go, honest! It's just that usually people have very valid reasons for dissent against policy, yet I couldn't deduce from your post what side of the argument you were coming from!

For the record, I fully agree with your post. Insolvency should be a way to deal with debt in the most efficient way, and I thought we were moving past being punitive or punishing towards people who need help.

Depth_Charge · 6 June 2017 at 11:00AM

Hi

No problem, I did not take it as having a go, not at all

You gave me the opportunity to explain further and I thank you for that.

There is more to be said to be honest its just that I have to be careful at times what I put up or the letters, messages and phone calls start:)

It wont stop me though:)

Nice talking with you BTW

DC

IPAs are changing

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free