Had Disturbing Letter today from my Solicitor.

[welshcake]

Hi All,

 

At this time I have a bankruptcy application form completed and my solicitor is awaiting me to raise the funds to make the partition.

 

He wrote to me today with concerns to my expenditure which he has stated the official receiver would deem luxury or non essential items.

 

The ones he lighlighted are as follows

 

Pet Insurance

Washing Machine/Tumble Dryer Breakdown Cover

TV Rental

Cigarettes

Payment to Father In Law

Payment to Brother In Law

Payment to Mother for Cooker

Kids Swimming Club

Child Trust Fund

Christmas Club

Going Out (Day Trips)

Nexy Directory (In Wifes Name)

 

Now I understand a few of those can be deemed as luxury items such as going out and cigarettes but shorly Kids Swimming Club and Child Trust Fund and even the odd day trip. We also have 2 cats one a Kitten as our last Cat got sick and because we had no insurance had to have it put to sleep which is why we took out the cover for the other two

 

We have 4 children so am I basically not allowed to take them anywhere or even put money into their accounts each month and remove them from their sports clubs. The letter I received basically states that I stop paying towards all of them and maybe think about going into an IVA or something with a disposible income of £350 each month which is a laugh.

 

Is their someone who has been through bankruptcy who can advise a more suitable expediture sheet as I really need this.

[palomino]

I've not been declared bankrupt so have no experience to speak from. In the absence of other comments I'll perhaps add some.

 

However I would listen to your solicitor and perhaps discuss the matter with him in more detail.

 

Bankruptcy is not meant to be a cake-walk. You owe more than then you can pay and the law obliges you to pay as much as you can. Some of the items you mention are deemed as luxuries, others are marginal while payments to relations are almost certainly not permissable. This is because these are debts which you are paying off at the expense of other creditors. The issue of the creditors being relatives is irrelevant.

 

The Official Receiver will want you to pay that money to him so he can pay it out pro rata to all creditors. Those people will of course become creditors and will (eventually) get a percentage of the amount owed.

 

As for the Next Directory, presumably you are paying this because your wife has no income of her own. Unfortunately because the account is in her name it is not included in your bankruptcy. On the other hand because you will be bankrupt you can't make the payments yourself as that money will be taken by the OR. Bit of a catch-22 here which you need to resolve with the solicitor.

 

Bear in mind that the OR will allow you reasonable living expenses. This might include the children's sports club. Your solicitor has raised this as non-essential however there might be a case for this being allowed. Depends on the OR.

 

hth

[PGH7447]

what Palomino said -

[welshcake]

Many Thanks for your advise. I have now revised my expediture and informed my family that they will have to wait until this is cleared up before I repay them, They were ok about it as they lent us the money to get ourselves out of the trouble we were in at the time.

 

My current financial situation is that my complete income is based on benefits of income support and carers allowance, Which makes me feel really ashamed to be honest that I am not able to provide for my own family. I wife suffers with Mental Health Issue's and our eldest son (13) Suffers with disabilities and attends a speacial needs school and we have a car on motorbility to get him around. The money I have coming in goes all on the family needs, I never go out I don't drink or smoke or spend £££ on luxury items. My debts come from years and years ago they are not Statue Barred as I was trying to make small payments to them a few years ago, My wife started to become sick after our last child was born, I had to give up work to care for her and our children and that remains the same, I tried to start up a small business a couple of times that both me and wife could part take in but it all went pear shaped and left me in alot of debt, So my debts are all from trying to make something of myself and not on holidays or cars etc, I am saying all this as I an a little annoyed that I know some people who have gone bankrupt and yet maxed out their credit cards knowing they are going bankrupt on valuble goods.

 

Anyway here is a breakdown of my new expenditure.

 

Home Contents Insurace £27.02

Life Insurance £17.02

Pet Insurance £10.44

Washing Machine/Tumble Cover £11.27

Gas £68.00

Electricity £98.00

Water £80.00

TV Licence £12.18

Petrol £80.00

Cardiff Council Repayment £25.00

School Meals £18.00

After School Club £26.00

HouseKeeping £620.00

Telephones/Mobile £46.49

Child Trust Fund £28.00

TV Rental £46.00

Haircuts £38.00

Clothing £73.00

Holiday Saving Fund £80

School Trips £10

Birthday/Xmas Gifts £40

Emergency Fund £25.00

 

This is based on my family of 6.

Edited February 10, 2010 by welshcake

[loobyloo85]

Hi there

 

I think your income and expenditure looks much better, as they definately would not allow payments to family members for monies owed. However, they may still query holiday saving fund, birthdays, child trust fund and high tv rental. Most of the time, they may be able to put some of these expenses under other categories. For example, holidays could be included within your contingency amount of £25. You just need to ensure you can fully justify all expenses. The OR would not allow any form of savings usually in bankruptcy, but you would have to check x

[debtinfo]

holiday is allowed

life insurance, emergency fund, presents are not

TV rental and washing machine cover are debatable

 

for the full guidance see this link

 

IPAs Assessment of Real Disposable Income

[welshcake]

holiday is allowed

life insurance, emergency fund, presents are not

TV rental and washing machine cover are debatable

 

for the full guidance see this link

 

IPAs Assessment of Real Disposable Income

 

I am really surprised to hear that Life Insurance is not allowed and thought really people would be somehow praised for doing this, So life insurance is not allowed yet pet insurance is fine?

[debtinfo]

Just to point out when we say not allowed we dont mean you are not allowed to have it, just that it will not be part of your essential expenditure. After that is worked out you will have a surplus, the OR may take some but not all of this surplus and the remaining amount is yours to do as you wish with

[welshcake]

Right I have contacted an OR myself and they were very helpful in pointing out things that are allowed and also useful information in general.

 

Life Insurance and general insurance are allowed

Holiday Fund is Allowed

After School Clubs are allowed within Reason

£20 a month is allowed towards Pet's this can include Pet Insurance

TV Rental Surprisingly is allowed again within reason.

 

I have also read in the information provided that it is highly unlikely a repayment plan will be ordered if the person's sole income is benefit based which mine is.

[banker_rhymes_with]

Hello welshcake!

 

Sorry to hear of your problems.

 

If I may add that I would seriously consider dropping all insurance, with the exception of mandatory 3rd Party Motor, and any compulsory buildings insurance.

 

Insurance is another Debt Industry con trick, playing on peoples' fears. It always costs more than the benefit you get, although they will highlight the exceptions to make people keep paying it.

 

Have you ever seen a poor Insurance Company?

 

Who places the most expensive and annoying adverts on TV?

 

My advice is to push that money in to the other key areas, and then try to save a little in a Jam Jar, to cover any real issues like Pet Care if and when it comes up. You may be surprised how big the Jam Jar needs to be after quite a short while...all of which would've gone to the Insurance Company had you continued paying them.

 

Personally, I would also take out any mention of Holiday Fund etc, and re-state the areas for food, kids etc.

 

IOW, start with a clean sheet of paper, and re-do everything, starting with only those things you must have to live and breath (food, heat, water, roof over your head). State the amounts needed here to the maximum, and do not be tempted to under-state them.

 

Then expand the list to cover the next most important issues, perhaps car, telephone, but only really basic things...no Insurance!

 

But, state the amounts fully for all the above, and push them up to what ever the absolute maximum amounts are that you are allowed.

 

If there is anything left, and it is allowed, then add that.

 

The point I am making is that you must push your limited budget into those areas that are plainly safe for you to add. Do not be tempted to under-state those amounts, just to allow room for, say, Pet Insurance.

 

Once your whole Benefits based budget is allocated on what are plainly essentials, then they can ask no more of you.

 

Then get that Jam Jar, and if small amounts of money are left at the end of each week, start saving, and tell nobody about the Jam Jar.

 

How you then spend that small amount of cash is entirely your own business, and can go on the little emergencies or luxuries that will come up and/or will be needed to keep you sane.

 

Best of luck with this. Keep going and just get to the end of the Debt Sentence now imposed upon you. Then you can move on, hopefully, to a better life.

 

Cheers,

BRW

[debtinfo]

Hi welshcake, are all your incomes from benefits, if so there is not a cats chance in hell you will get an IPA, so i wouldnt worry

[welshcake]

Hi welshcake, are all your incomes from benefits, if so there is not a cats chance in hell you will get an IPA, so i wouldnt worry

 

Hi,

 

Yes all income sadly at the moment is from benefits. In the not to distant future I want to try and start up something again from home that me and my partner who suffers with mental illness can get involved in so I need to get this sorted first otherwise if we make a go of it we will be hounded by DCA's again and again.

[debtinfo]

no need to worry then, if your income stays as benefits throughout the bankruptcy, you will not get an IPA, its that simple