Reasonable Expenses for my DMP

[BlurredFX]

I am in the process of dealing with all my creditors, and slowly getting there.

 

I am not sure what I can put down as reasonable expenses for Food, Clothing, Socialising and Smoking.

 

Are there any guidelines?

 

FX

[IdaInFife]

this should help you:

 

National Debtline England & Wales | Personal Budget Sheet

 

 

ida x

[mustang67]

You do not have to tell creditors this information.

[BlurredFX]

I understand that I do have to provide creditors with this information; it may be unreasonable for them to ask for documentary proof of every last detail. As I understand it, the Court would not ask for full proof of every last penny, and therefore my creditors cannot either. Am I mistaken in this belief?????

 

Thanks for the link, Ida, but is there any actualy guidelines as to what is reasonable spending?

 

Given my way, I would regard a couple of hundred quid a week down the pub as reasonable, but clearly my creditors could dispute this... easily!

 

I just want to end up in a situation that I can live with and will resolve my problems, without having to live like a monk for two years.

 

Cheers

 

FX

[mustang67]

If you Google Debt Advice Then go onto Completing Income & Expenditure Form all will be revealed

[BlurredFX]

Do you have a link, Mustang?

 

I cannot see "Completing Income and Expenditure Form"

 

FX

[mustang67]

Sorry about that, should have put Google Income & Expenditure Then scroll down page and Debt Advice should be top one after sponsered links

not sure how to do a link!!

[loobyloo85]

For my DMP, I needed to stick within the BBA guidelines.

For housekeeping it is usually £180-£200 for a single person, clothing £20, socialising £20, and I am unsure about smoking, but you are allowed contingency x

[suzieblooz]

There is an excellent sticky by Sequenci on this subject - link here

http://www.consumeractiongroup.co.uk/forum/getting-out-debt/120603-how-get-out-debt.html

I suggest you read the whole thing but in the meantime the bit relevent to your question is:

STEP TWO: YOUR OUTGOINGS

 

When it comes to outgoings it is vitally important to ensure you consider all the essentials that you will need to pay each month. These include the obvious payments such as housing costs, housekeeping and utility bills. You should also factor in the less obvious outgoings such as TV licence, health costs and emergencies. The key to an accurate budget is to ensure that your figures give a fair snapshot of how things really are, one thing to bear in mind is that a month is NOT 4 weeks, if you pay for items on a weekly basis you will need to multiply that figure by 52 and divide it by 12 to get the correct monthly figure.

 

One of the key stalling blocks for many is the figure for Housekeeping. This is the figure which includes food, toiletries, cleaning materials, newspapers etc. It should also include a small figure for entertainment. Your creditors will have general guideline figures that they will expect you to adhere to, if you have any reason as to why your figure might be higher than normal you will need to quantify it, perhaps you have a special dietary requirement for example. To get you started a typical housekeeping figure for a single person is £140/month, for a couple it is £230/month, for each dependant you’re looking at an additional £85/month. Please bear in mind these are very rough guideline figures and you may actually spend a bit more or possibly less. I really wish to stress that creditors will refuse a budget if you have a ridiculously excessive housekeeping figure. If you’re savvy you can shop around to find bargains, don’t be afraid to visit Aldi or Lidl and also your local food market.

 

When calculating your travelling expenses please remember to factor in monthly amounts for items such as road tax, maintenance, MOT, insurance, Roadside assistance as well as petrol. If you have purchased your vehicle via a lease, HP or Bill of Sale arrangement you MUST record this figure in your essential outgoings too, the reason being is that the creditor may be able to use repossession if you fall behind on payments.

 

It is perfectly fine to have a Sky or Virgin Media package so long as you are only paying a reasonable price, invariably this means that you may need to consider cancelling the premium channels such as movies and sports. If you’ve been with your supplier for over a year you might be able to renegotiate a cheaper package and keep these channels for a much cheaper price. You may also be able to do this with telephone and broadband packages.

 

You might have an entitlement to free prescriptions, dental treatment and glasses. Contact the health costs advice line on 0800 917 7711. If you cannot claim free prescriptions you might be able to reduce the cost by buying a prepayment certificate.

 

It is important to also factor in amounts for clothing, birthdays, Christmas, emergencies and other miscellaneous expenses, remember you might need to quantify your figures.

 

[mustang67]

I did one with CCCS a few years ago.The figures I came up with allowed me fifty quid to pay creditors. But when I gave these to CCCS on the phone , they whittled them down even more, that I was just down to paying token payment of 1 pound each to 5 creditors. They told me to put down more in the emergency fund, more for clothing and to have something left to spend how I wanted to. You have to have a life as well, I was told. Was quite happy with that.

And that is all I am paying.

If in doubt just massage the figures.

At the end of the day it's your business not the creditors and you do not have to supply this information only a court can demand it.

Edited June 11, 2009 by mustang67
more detail added

[fresh-start]

edit: found out the answer myself. insolvency .gov.uk had a great spreadsheet for classifying expenses correctly.

Edited November 22, 2012 by fresh-start

[Bazooka Boo]

TBH, it all depends on what the debts are. And whether they are still adding interest and charges. The I&E sheet is for your own personal use, not to be sent to unqualified debt collectors.

[fresh-start]

TBH, it all depends on what the debts are. And whether they are still adding interest and charges. The I&E sheet is for your own personal use, not to be sent to unqualified debt collectors.

 

Could you elaborate please? When you say 'what the debts are', do you mean how large they are or what type of debt, e.g. credit card, overdraft, loans, finance agreesents etc...?

 

Mustang67 said that in his case, he was able to pay £1 per creditor. Realistically, would a creditor who is owed £5000 really accept anything less than £10 / month? Assume that the debtor is genuinely being honest and realistic about expenses (with none of them near the thresholds accepted according to insolvency.gov.uk). Income is just abysmal plus some unfortunate expenses like medical (non private healthcare insurance).

[Bazooka Boo]

Yes sorry, Loans credit cards, overdrafts?

 

And even if a debt is 5k and all you can afford is £1 a month, then that is all they will get.

[fresh-start]

Yes however they might choose the reject my offer? Basically I've tried to be honest with mine, however I've seen stories of the OR (whoever that is) rejecting anything >£450 housekeeping expenses for a married couple with 3 children.

 

How can any creditor realistically put me on a debt management plan where I repay a £6000 debt with just £1 per month? I can actually afford £7 per month for my largest creditor according to my I&E which amounts to needing 71 years to clear a £6000 credit card! I don't see any company accepting that proposal?!

[Bazooka Boo]

Your all looking at this with a pessimistic view.

 

It matters not one jot what you owe, as long as it is unsecured debts, and they are NOT priorities, ie, rent mortgage, council tax, utility bills (less clean water) then it is YOU who tells THEM what YOU will pay, you DO NOT need to send them any I&E form/sheet, especially if this is a debt collection agency, granted it may be beneficial to your case IF your agreement/account is still with the Original Creditor (OC), but if it has been farmed out or flogged off to a third party debt collector, who have no legal powers, then they have absolutely NO legal rights to ask for, let alone view such private confidential information.

 

It is YOU who is in control, whether they accept your offer of payment or not, it doesn't matter, if all you can afford to pay is £1 a month then that is all you need pay, no judge in the land would force you to pay more than you can afford.

 

Stop believing that they somehow have all the rights and powers, they don't. They cannot refuse your offers of payment, hence why you keep everything in writing, and if they do refuse then they can commit it in writing, then you pay what you offered regardless, then if they are so foolish as to put this before a Judge they will be laughed out of the court and told to shut up.

[fresh-start]

Thanks for the encouraging and dare I say, empowering message I feel better.

 

I best explain, at the moment I'm still only dealing with creditors, no DCAs. No defaults and no minimum payments. However up till now I've been needing to borrow from family to meet about 1/4 of my minimum payments and/or letting them use joint credit cards in my name in exchange for money for the minimum payments.

 

However since they've had to re-mortgage and have run into their own problems, this is no longer tenable and if anything, I need to contribute more to ensure that we keep a roof over our heads.

 

To get things started:

 

 

• I've setup a parachute a/c rather than using my usually maxed out OD to make payments. It was REALLY refreshing to see a positive balance for the first time in years (i.e. since creditors first kindly offered me an overdraft at 16).
  
• I am currently waiting for CCCS to 'make it' to one of my phone appointments to discuss options. I'm hoping that they will be able to negotiate freezing interest and using realistic figures for repayment.
  
• I've opened a credit rebuilding a/c with a modest limit to be used for purchases with the balance cleared each month to help recover from the default entry on my file if/when I get onto a DMP.
  

 

Until then, I'm working 16 hours/week (+part time education). I'm also selling various things round the house which were collecting dust to continue to meet the current minimum amounts until CCCS can get me on a DMP.

 

I know I should try to negotiate myself, however with 3 hours of physio and other rehab daily, studying, work and lastly (should be higher in my priorities I know!) family and other household obligations, I just don't want to deal with direct negotiation. Besides which, I'm hoping that the creditors will take me more seriously if CCCS act as a proxy.

 

Wow, it was quite cathartic getting all that into writing

 

If anyone has any other suggestions, please let me know. Perhaps I should have done the CCA, SAR requests and claiming back charges steps first. However at the moment I think that monthly interest probably outweighs any charges (even with compound interest on them over the years). Therefore moving to get interest frozen with realistic monthly payments towards debt and to stop using credit to pay for essential costs like food, utilities etc ASAP seems like the higher priority.

 

Lastly, all debts are on my Experian file so I don't think I have any grounds for claiming that the debt is not enforceable. As mentioned, I'm not dealing with any DCAs, just original creditors aside from Barclaycard who took over my Egg Credit Card a/c.

Edited November 28, 2012 by fresh-start

[Bazooka Boo]

http://www.consumeractiongroup.co.uk/forum/content.php?590-Creditors-and-DCAs-Letter-Templates-Budget-Planner

 

Have a look through the above link, I was trying to find the 'Hardship' letter, however there are plenty of letters in their which you can start the ball rolling to advise your creditors that you cannot maintain the current repayments, and ask for their help. They 'should' either freeze interest and stop charges altogether, or ignore you all together and you will need to take a more aggressive approach.

 

Communication with your creditors is the key, keep everything in writing, get everything committed in writing for your own evidence, never discuss financial matters over the phone, unless you can record your calls.

[fresh-start]

Thanks for your continued help and advice. If CCCS/StepChange don't make it to the next phone appointment, I think I will have to get things started on my own and send the letters. I'm still a bit confused about a few things.

 

If I do send the relevant letter from the link (Letter B) with a signed I&E sheet (either from My Moneysteps, CCCS or National debtline) showing that I only have a small amount of money left for each creditor's monthly bill I assume that I will be shown as being in default from the 1st day I miss the usual large payment.

 

Is the following link right:

http://www.consumeractiongroup.co.uk/forum/showthread.php?347162-DMP-questions&p=3805212&viewfull=1#post3805212

 

i.e. that even if I am still on a DMP/making reduced payments 6 years from now, the entry will be automatically removed from my CR file?

 

Thanks

Edited November 29, 2012 by fresh-start