Issues and questions that come up during your bankruptcy period

Moderators: TalbotWoods, JaneClack

By smiales
#195401
******* wrote:Water £40 a month ! :shock:

We live in a huge 3 bathroom house & were on a water meter and we pay £11 a month in the expensive South ?

Maybe we need a meter then because this is what is on our bill and OR has a copy?

Optical £70 a month !

Explained in other post

Even if 2 of you were on monthly contact lenses it does not add up to that

2 Lots of life ins ?

Explained above

No way will that be allowed it will go to the OR anyway if anything happens to you in your bankruptcy, & the only way to keep it is to pay typically 12 months premiums to OR

Only part would go to the OR, if I dropped dead tomorrow I cannot leave my OH with the mortgage to pay on his own, the mortgage outstanding is much more than we owed

Or do as most have to cancel the policy go without and hope you dont die whilst bankrupt

I just don't get that - the OR has never questioned the life ins? Its absolutely nessessary surely? If we were renting maybe not but we aren't

House Maint & Car Maint too high

You do have available income for an IPA
This is why its so important to get proper advice before going bankrupt
Some of your things will not be allowed
Others the OR will want proof as they are higher than the norm


Even if you removed the things you think should be removed there is no where near enough for an IPA? Unless you can see something I can't?
User avatar
By TalbotWoods
#195402 smailes

OK your making a classic mistake that MANY people make in bankrupty you are assuming the OR will lump both yours and your partners I&Es together.

The OR (in most cases) when both people are working can and do apportion I&Es based on income levels especially when one partner has a much higher income level (remember bankruptcy is individual hence the two applications)

So for example you earn £695 and your Partner earns £1164 so the income split is 38% (You):62% (OH)

Which means all expenses must be individually apportioned in that way
and the I&Es need to be separated at this stage.

The other aspect of this is that items such as AA can only be claimed by the car driver, and not both!!

Once this is done you may well see a significance as to what the OR is up to!!

Tim
By smiales
#195404
TalbotWoods wrote:smailes

OK your making a classic mistake that MANY people make in bankrupty you are assuming the OR will lump both yours and your partners I&Es together.

The OR (in most cases) when both people are working can and do apportion I&Es based on income levels especially when one partner has a much higher income level (remember bankruptcy is individual hence the two applications)

So for example you earn £695 and your Partner earns £1164 so the income split is 38% (You):62% (OH)

Which means all expenses must be individually apportioned in that way
and the I&Es need to be separated at this stage.

The other aspect of this is that items such as AA can only be claimed by the car driver, and not both!!

Once this is done you may well see a significance as to what the OR is up to!!

Tim


The OR told us to do a joint flippin SOA! So is this not right? We have spent months sorting this out, what do I do now? Do I have to go through the SOA and split it into the percentage you have said?? God now I'm really confused. We even asked the OR early on whether we should do it together or seperately and they said together. Do you think this effects us negatively??
User avatar
By moaner
#195405 Just for info, we are on a water meter, 3 bed semi with 3 bathrooms, 2 adults and 3 teenagers and we pay £70 per month, this is spread over the year by direct debit and was never questioned by the OR. It is actually what we use and I try to be really careful with the washing machine, etc. I never wash my car

I am forever telling kids to hurry up in the shower :mrgreen:
User avatar
By TalbotWoods
#195406 OK if he has told you to do a joint I&E that is much better, as this means he is not going to play the apportion game, which can be a nightmare!!

So now we can look at the individual items on your SoA.

The following will not normally be challenged as these are figures that the OR has little or no control over:

COUNCIL TAX £80.00
WATER £40.00
GAS £44.00
ELECTRICITY £30.00
TV LICENCE £12.00

Now for those that the OR could disagree with, so you may need to produce evidence that you could not obtain cheaper:

CAR INS (BMW) £28.00
CAR INS 1 £27.78


Now for those the OR can get grotty with and I'll explain why with each:

LIFE INS 1 £19.12
LIFE INS 2 £11.24

    Normally all life insurances are claimed by the OR even if they have no cash in value, you are also normally given the chance to 'buy them back' for the equivalent of 12 months premiums. THis is why most people have to shop around to find new life insurance once they go bankrupt!!

PRESCRIPTIONS £20.12 2x prepay certificate

    ORs know how much these cost and the current PPC is £9.98 per month per person so the maximum the OR would allow here is £20

FOOD/HOUSEHOLD £379.00

    The current accepted figure for a couple with no children is about £314 per month, should it be higher then the bankrupt would need to justify why it is higher

CAR TAX £34.00

    Now I am going to assume that the OR has allowed for both of you to keep your cars (which is rare), if this is NOT the case then the OR know that the maximum RFL costs £400 for a new high powered car, so he would take the average (which is £165 per year) and you would have to fund the difference out of your surplus

HOLIDAY £60.00
HOUSE MAINT £45.00
DENTIST £15.00
HAIRDRESSERS £25.00
CLOTHES £60.00
CAT £20.00
AA £10.00

    Now these can be discretionary with ORs' though the guidance states they are there, it is entirely down to the ORs discretion, some do allow some dont, a lot will depend on local circumstances.

PHONE £65.00

    Sorry not a hope, the maximum ORs allow for this is £20 per month the rest has to come out of you surplus! If it is essential for work the OR will need to contact your employer to confirm this

STUDENT LOAN £150.00 arrears as forgot to defer

    I suspect the OR will disallow this as it was entirely down to your fault that you didn't defer it, and if you contact the SLC they will very often (once they have confirmation from the OR) defer until after discharge or end of IPA)

MORTGAGE £850.00

    And this could be the biggy, though ORs allow mortgages, if they deem it excessive they can disallow part of this. The acid test is the rental costs for a property that is suitable for your needs in the area, so for example if the rental for a 1 bed house is £650 per month, and you are claiming £850 for the same size property, the OR can deem that as being excessing and claim back £200 per month. IF the property is far to big for your needs (as defined in the Housing Acts) then the OR will often do this.

    There have been a few cases on here in the past couple of years where ORs have done this, it has gone to court for an IPO hearing and the judge has found in favour of the OR, on the basis that the bankrupts are living in a property that is excessive for there need and thus detrimental towards creditors

So as you can see I&Es are not straight forward and ORs can deem some expenditure as excessive.

If you genuinely have a deficit at the end of the expense, then the OR has a duty to reduce this and that can include re-visiting exempted assets and property!!

Hope that helps explains some of the ORs views

Tim
By smiales
#195408
TalbotWoods wrote:OK if he has told you to do a joint I&E that is much better, as this means he is not going to play the apportion game, which can be a nightmare!!

thats a good thing then thank goodness!

So now we can look at the individual items on your SoA.

The following will not normally be challenged as these are figures that the OR has little or no control over:

COUNCIL TAX £80.00
WATER £40.00
GAS £44.00
ELECTRICITY £30.00
TV LICENCE £12.00

good again

Now for those that the OR could disagree with, so you may need to produce evidence that you could not obtain cheaper:

CAR INS (BMW) £28.00
CAR INS 1 £27.78

We shopped around loads for these a few months ago so hopefully this is ok

Now for those the OR can get grotty with and I'll explain why with each:

LIFE INS 1 £19.12
LIFE INS 2 £11.24

    Normally all life insurances are claimed by the OR even if they have no cash in value, you are also normally given the chance to 'buy them back' for the equivalent of 12 months premiums. THis is why most people have to shop around to find new life insurance once they go bankrupt!!

Ahh right, well we had ended our previous ins before going BR and declared it to the OR. There was no value in them as we had only had them for about a year. We have only had these new ones going for the last few months (after BR) and the OR hasn't actually questioned it at all. But then the judge could I suppose?

PRESCRIPTIONS £20.12 2x prepay certificate

    ORs know how much these cost and the current PPC is £9.98 per month per person so the maximum the OR would allow here is £20

Mine was £10.25 and OH's was £9.87 I did mine since april 08 so presume the charges have increased slightly.

FOOD/HOUSEHOLD £379.00

    The current accepted figure for a couple with no children is about £314 per month, should it be higher then the bankrupt would need to justify why it is higher

We were told by the OR that they allow £379, hence that is what we have put! If the judge queries it we will have to reduce.

CAR TAX £34.00

    Now I am going to assume that the OR has allowed for both of you to keep your cars (which is rare), if this is NOT the case then the OR know that the maximum RFL costs £400 for a new high powered car, so he would take the average (which is £165 per year) and you would have to fund the difference out of your surplus

Oh the joy of the cars, we have fought hard to keep both the cars, they were both registered to OH which meant the ORkept refusing the one even though it is actually mine. Eventually they let me make a third party offer and accepted it (£100) so I presume now that the OR IS allowing both in our i&e - although I know we can't presume anything! The joint value of the cars is only about £1000 so they aren't flash or anything. Sorry for being dull but what is RFL? I got a bit lost on the last bit!

HOLIDAY £60.00
HOUSE MAINT £45.00
DENTIST £15.00
HAIRDRESSERS £25.00
CLOTHES £60.00
CAT £20.00
AA £10.00

    Now these can be discretionary with ORs' though the guidance states they are there, it is entirely down to the ORs discretion, some do allow some dont, a lot will depend on local circumstances.

So we have actually done ok on these things then really as the OR hasn't disputed any

PHONE £65.00

    Sorry not a hope, the maximum ORs allow for this is £20 per month the rest has to come out of you surplus! If it is essential for work the OR will need to contact your employer to confirm this

Again I think we've been lucky then as the OR has agreed this, (mobile and home phone as OH travels out to the middle of knowhere at odd hours so agreed mobile could be allowed. Starting to worry that a judge could take all his off us....

STUDENT LOAN £150.00 arrears as forgot to defer

    I suspect the OR will disallow this as it was entirely down to your fault that you didn't defer it, and if you contact the SLC they will very often (once they have confirmation from the OR) defer until after discharge or end of IPA)

I understand this, the problem we had was that because of the NT the SLC thinks OH has gone over the threshold and backdated what he should have paid. We have tried explaining it to them but they won't budge. We have told the OR all this but if neither budge what can we do - the money has to come out each month one way or another doesn't it.

MORTGAGE £850.00

    And this could be the biggy, though ORs allow mortgages, if they deem it excessive they can disallow part of this. The acid test is the rental costs for a property that is suitable for your needs in the area, so for example if the rental for a 1 bed house is £650 per month, and you are claiming £850 for the same size property, the OR can deem that as being excessing and claim back £200 per month. IF the property is far to big for your needs (as defined in the Housing Acts) then the OR will often do this.

    There have been a few cases on here in the past couple of years where ORs have done this, it has gone to court for an IPO hearing and the judge has found in favour of the OR, on the basis that the bankrupts are living in a property that is excessive for there need and thus detrimental towards creditors

Right this is a biggie I agree, we have a one bed terrace house but the mortgage is crazy, unfortunately we are in negative equity so feel a bit stuck as to what we can do, we could rent something bigger and cheaper. I reckon the rent for our house would be £550pm so there is a big difference there. At a loss as to what to do about this

So as you can see I&Es are not straight forward and ORs can deem some expenditure as excessive.

Believe me I know they aren't straight forward. At times like this I kind of wish you had agreed to the initial offer as it was £110pm - now its doubled and the judge could make it even higher

If you genuinely have a deficit at the end of the expense, then the OR has a duty to reduce this and that can include re-visiting exempted assets and property!!

Hope that helps explains some of the ORs views

Thanks for spending time to go through this with me, I am more stressed than before but hey ho, at least I have got some views on the situation! :?

Tim
Bysurfbabe
#195414 Hi

You say on many of your IE items that they are agreed by the OR

But obviously by asking for the £220 he/she disagrees something somewhere

I don't mean to be dim but are you 100% sure that in all your dealings written & verbal that the OR has never said what hes taking out of your IE

He must be confident to go for an IPO rather than an IPA
Do you have a date for it being heard ?
By smiales
#195423
******* wrote:Hi

You say on many of your IE items that they are agreed by the OR

But obviously by asking for the £220 he/she disagrees something somewhere

I agree, there is something that is obviously wrong but we don't know what. The only possibilities we can think of for sure are that although they have allowed us to make a third party offer on the one car they don't have any intension of actually allowing me to keep it now that it is mine and therefore they will remove the expenditure for my car and use that as surplus.

I don't mean to be dim but are you 100% sure that in all your dealings written & verbal that the OR has never said what hes taking out of your IE

As I have said before, the OR has never given us a full updated i&e as they see it, they only comment on the odd thing in each letter leaving us to work out the i&e based on bits of their figures

He must be confident to go for an IPO rather than an IPA
Do you have a date for it being heard ?


Yep court date set for June
By smiales
#195425 Just been going through figures and if the OR/judge reduce the following to
£30 optical (from 70)
£20 phone (from 65)
£0 life ins (from 11.24)
£0 life ins (from 19.12)
£0 student loan (from 150)
£320 household (from 379)
£0 holiday (from 60)
£0 house maintenance (from £45)
£0 remove one car (from 179.78 - ins, maint, tax, aa, petrol)

We are still only left with £70 surplus and i really don't see what else they could cut? Unless they do something about the mortgage?
User avatar
By TalbotWoods
#195437 smailes

OK your next step (which will help any defence as well) is to write by recorded delivery to the OR and ask for his break down, in the same letter make the following points clear:

They you have repeatedly asked for there breakdown, which they have repeatedly failed to supply. [refer to the phone, email and/or written communications]

That you are at a loss as to how they arrived at their figures considering that your I&E remains the same as when you went bankrupt and they are now proposing a 100% increase on their original suggestion, which again they failed to justify to you by producing their calculation.

That by failing to produce these figure to you, that they are significantly failing in their duty to keep you informed, and by doing so have shown a complete disregard for procedure, which could be seen by some to be tantamount to gross maladministration, as they are preventing you negotiating.

Now this has this effect,

If they still fail to produce it, you then have a massive defence in court, and can argue to the judge that you are unable to defend as they have consistently failed to produce the calculations, or explain how they arrived at them, so in effect have failed to evidence to you the IPO, which, of course, you would have been willing to negotiate over.

If they send it to you , then you have a dammed good idea what they are on about and will have time to evidence your expenditure items, but remember take ALL the evidence with you to court, Judges wont accept verbal statements!!

If they only produce it on the day, then you can ask for an adjournment, pointing out that you have never seen it, so are unable to defend it, an once again produce the letter as proof that you have formally asked for it!!!

Hope that that helps a bit

Tim
By smiales
#195443 Ok major dopey confession, just been going through the court documents again and have found a single sheet with the OR's calculations on! In my defence the packs are huge and it was right in the middle!

Anyway so here is what the OR's final figures are:

COUNCIL TAX £76.00
WATER £40.00
OPTICAL £30.00
PHONE £65.00
GAS £44.00
ELECTRICITY £30.00
TV LICENCE £12.00
HOUSE INS £26.00
LIFE INS £19.12
LIFE INS £11.24
CAR INS (1) £-
PRESCRIPTIONS £15.00
MORTGAGE £701.00
CAR INS (2) £25.00
STUDENT LOAN £-
PETROL £100.00
FOOD/HOUSEHOLD £379.00
CAT £20.00
HOLIDAY £60.00
HOUSE MAINT £45.00
CAR MAINT £50.00
CAR TAX £17.00
DENTIST £15.00
HAIRDRESSERS £25.00
CLOTHES £60.00
AA £3.00
DRY CLEANING £10.00
PENSION 1 £60.00
PENSION 2 £48.00
TOTAL £1,986.36
INCOME £2,380.00
DISPOSABLE £393.64

This is where the £220 IPA has come from. However, the OR hasn't taken into acc the fact that the incomes are different. OH's position has been altered as he was on a temporary higher grade for a while and mine has reduced as well. Income is now £1858.86 - £1986.36 leaves us with -£127.50

We have written and told the OR about the changes to salaries but they haven't amended the i&e, probably because they have only had proof from us not our employers - only because we waited to get the letters, we now have them both so will get them in the post on Monday

Can't believe I've only just spotted this, it was well hidden in the bumf though. This is the first time we have ever seen the whole i&e since going BR last Aug so although I am pleased to finally see it I am annoyed that they have kept it from us until they have sent the court documents. This could have been sorted much sooner if they had just given us this 6 months ago.

I am confused about the car situation still though as I have paid the OR money for the one car and yet they haven't included the expense of the car on the i&e. If we had known they were going to disallow it we wouldn't have bought it off them. Seems a bit dodgy to me.

I have drafted a letter back in response as I really don't want to have to go to court, do you think the OR will even look at the case again now or will they leave it for the judge?