1 Year Review Question

[Debt Monkey]

This is posted elsewhere so apologise if you have already read it. I have just had my financial review paperwork back and I have a problem if you can help me please. On my original proposal I had the following expenditure, bearing in mind this is for me and my wife do these figures sound low:
1) Food & Household Goods - £260
2) Clothing (bearing in mind I regularly meet clients so have to be dressed in a professional manner and my wife is a nurse and has to buy certain shoes for work) - £50
3) Telephone £40
4) Personal Hygiene/Haircuts etc - £50

When I sent off my financial review I said that £60 per week was not enough for food and household goods and that without buying luxury items such as alcohol we regularly spend £80 to £100 a week, is this excessive? My IP has told me that they can not change what I originally put as £260 per month. Clothing of £50 I tried to increase to £130 but was again told I could not increase it from my original £50. Telephone expenditure is regularly £65 including both of us to have a mobile phone, is this acceptable? I was again told they could not increase my original £40. Not included on the original proposal was anything for our pets, we have four cats and never budgeted for food, insurance or vaccinations. I have been told that as they were not on the original proposal I can not budget for any costs associated with my cats. I also never budgeted for sky tv, I know this is a luxury but I reduced my subscrition from £44 per month to a basic package of £18, again I was told this could not be included as it was not on my original proposal. I am concerned that the amount they now want us to pay is too high and we will not be able to afford it, they are basing our new repayment on our basic salaries less our original budget and then asking for 50% of the difference but why can they not take account of the fact that my original budget was wrong? When they prepared the budget I wrote to them and said that it was not accurate but they told me not to worry about it, now they are telling me I can not change it and asking for an amount of money that I do not feel is acceptable given the outgoings we have detailed above. Any thoughts on what I should do next? I have spoken to my IP on the telephone and he has told me that there is nothing he can do about it, not the helpful response I was after, good job there is iva.co.uk to fall back on for some sound advice.

DM

DM

[BlueShoes]

Hello
If the repayments are causing you financial difficulty, the IVA is likely to fail, and I suspect that is not what creditors want.
I'm not an expert, but I would say go back to your IP and explain you will not be able to continue to make the payments unless they are amended to match your income and expenditure.
I thought the IVA was supposed to be "individual" so that, within reason, it could reflect what you actually need to spend.
Good luck
Blue

[MelanieGiles]

There must be some way of compromising with your IP here, but you should not have signed up to a proposal where you felt the figures were wrong. The fact that you have managed the payments during the first year, is probably leading your IP to the view that you can afford to make them, and I do not feel that a clothing budget of £130 is acceptable expenditure - and there is no way that creditors would agree to you being given an allowance for that much for two adults. Sky TV is a luxury, but I agree that you ought to be made allowance for your pet expenditure. Why was this not allowed in the original proposals?

Given that inflation levels are currently running at between 2 & 3%, I would not expect to see more than a 5% increase in my own clients expenditure, unless their circumstances have vastly changed.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[phill]

Monkey,
I am in a similiar situation to you my orginal proposal figures are just not enough to live off and i am going to request they are altered as the iva will fail if they arent! Any one had the same problems and if so what was the outcome? Also in your iva proposal can you have an allowance for entertainment as it seems in practical not to be allowed say £10 a week for a beer with your mates or to go to the cinema once in a while?

[phill]

Melanie,
I hear what you are saying about not signing a proposal that you couldnt keep up but the reason many people get into debt in the first place is because they are unable to accurately predict their out goings and in comings is it not? No matter how hard i try to predict my monthly expenditure it is always incorrect!!

[BlueShoes]

Hello philltomo
I find that we are usually pretty good at budgeting for the expected, but have had such little leeway in our monthly budget for the last 8 years or so that the "surprises" such as a £2000 car bill, a £1000 bill to a previous employer for training received and the usual child care arrangements going belly-up, and having to use a childminder who charges nearly double the previous rate have all contributed to the mess we now find ourselves in.
Not forgetting the poor decisions we have made too, like buying a 4x4 and trebling the petrol bill, and then losing £4000 selling it 3 months later!
And buying an old house which isn't in quite as a good a state of repair as we first thought!
Hey ho!
Blue

[Phil]

Hi all,
Melanie does that mean with Inflation a roof of 5% on expenditure as a approx figure.
Thanks Phil

[Debt Monkey]

Hi Melanie,
Yes we did manage the initial payments as my wife put in alot of overtime and I changed jobs for a slightly higher salary. The initial proposal should not of been signed I appreciate that now but as I am sure you can appreciate it was a very difficult time and the proposal they offered seemed affordable. I will contact my IP again and see if they will amend it but he seemed pretty sure that he would not. I did not take enough time to correctly evaluate all of our outgoings and as a result we are going to struggle from now on. Is there any reason why my IP would not amend my income and expenditure statement?

DM

[MelanieGiles]

Your IP ought to listen very carefully to what you are saying, as you are the ones who have lived this existence for the last year and ought to know whether you have struggled or not. There are really no points to be scored by being bullish on their parts, but you will need to justify by proving that your expenditure has been a lot higher than you previously budgeted and why this has happened.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk