Comments on: Expenditure - Just what is allowable?

By: melaniegiles

melaniegiles — Tue, 20 Feb 2007 23:03:24 +0000

Hi Butterfly

If you are going to enter into an IVA, only do so if you really feel that you can afford the payments. Creditors are really pushing hard at the moment to squeeze every penny out of people, and in my opinion this will lead to a rise in IVA failures over the next 12-18 months.

Think things through carefully before you commit.

By: butterfly

butterfly — Wed, 14 Feb 2007 20:33:53 +0000

We are just in the process of applying for our IVA and having read this post We are now very very anxious. We do not want to have to declare bancruptcy and debt management is out of the question. If our IVA doesn’t get accepted I don’t know what we will do. We will be pushing it to afford the payment as it is let alone if the creditors want more.

By: Brian

Brian — Thu, 08 Feb 2007 21:48:14 +0000

Hi Melanie, I’m pleased to see you highlighting this problem. Like you, I have experienced a shift in goalposts in recent weeks and it is making it much harder to get realistic proposals accepted by creditors. It is also tough sometimes stressing to Debtor’s that increased VCs requested by creditors may not be truly affordable. Only time will tell if recently approved IVAs fail in the first year beacuse of this added pressure.

As well as the sea change in expenditure, I have often argued that the general benchmarking of acceptable minimum dividends is also a lazy way out for creditors (or their agents). We IP firms know to put the best offer forward, which is affordable to the Debtor but also offering the best return to creditors. If somebody’s circumstances dictate that this offer may be 15p in the £ or else bankruptcy, why should it not be considered?

I had a case recently with a guy emigrating abroad. He was selling his house in the UK and offered the whole equity in satisfaction of his £100k debt. The 15p dividend on offer was rejected, so he took the money with him. He has no intention of coming back and it is unlikely any creditor will make him bankrupt. Despite my best efforts to persuade creditors that £15k return was not bad in the circumsatnces; because it was below the specified minimum, it was rejected.

Unfortunately, it seems that the belief and faith in IPs doing their job is diminishing fast. IPs are qualified professionals in their field - I say let them get on with their job. We are not to blame for the rise in IVAs.

By: Debtdummy

Debtdummy — Sun, 28 Jan 2007 21:37:54 +0000

I have a fuel cost per month at £30 which was altered by the IP. This was for TWO cars. The electric bill which is £45 a month became £30. The clothing for a family of three became £40 a month; and the rest is too unrealistic to believe. My husband and I are amazed that the real figures were not used. Even the child support (£150/month)which will end in 7 months was not reported as such. On paper we look as though we can afford an IVA.

My husband and I sat down and took a good hard look at the IPs figures.
You know what? We realised this weekend an IVA it can NOT be done.
We discussed it and came to the realisation we didn’t see it before because we were afraid of losing the house. In our fear and desperation of losing our home which we love our minds tried to convince us otherwise.

A word of advice. NO matter what your IP states are your expenditures take a calculater and a very objective mind and SEE what you can actually afford. An IVA is a serious undertaken for several years. DO NOT play with your future. YOU know what it takes for you to honestly live on.