{"id":1524,"date":"2013-12-17T09:47:54","date_gmt":"2013-12-17T09:47:54","guid":{"rendered":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/?p=1524"},"modified":"2019-02-12T16:11:02","modified_gmt":"2019-02-12T16:11:02","slug":"disposable-income-in-an-iva","status":"publish","type":"post","link":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/disposable-income-in-an-iva\/","title":{"rendered":"Disposable Income in an IVA"},"content":{"rendered":"\n

A good proposal for an Individual Voluntary Arrangement or IVA will have at its heart a sensible, realistic and well constructed Income and Expenditure Statement or I&E. <\/p>\n\n\n\n\n\n\n\n

The statement of income will be transparent, complete, accurate and truthful. The statement of expenditure will reflect the reality of the living expenses incurred by the debtor and his or her dependents and will be within the normal range of reasonable living expenses for a family of that size and age profile for the area in which they live. A concern for anyone who is contemplating entering into an IVA is whether their creditors will look for the last penny of disposable income to be contributed, leaving nothing for sundries or emergencies. <\/p>\n\n\n\n

\"Debt<\/figure><\/div>\n\n\n\n

In truth, a good I&E should include a reasonable amount set aside\n for sundries or emergencies. If the insolvent debtor is single with no \nfamily commitments then the amount will be smaller than where there is a\n spouse or partner and\/or dependent children. In the latter case, what \nwe have is a statement of family income and family expenditure. How much\n is a reasonable amount? One yardstick used is that the family I&E \nshould allow a single debtor to retain for sundries and emergencies a \nmaximum amount per month of about \u00a312, a couple \u00a323, each extra \ndependent adult \u00a312 and each child \u00a311. Creditors may sometimes decide \nthat in all the circumstances of the case, such allowances are too \ngenerous and may seek to reduce them somewhat. In the end however, the \ndebtor will have control over a certain amount of the disposable income \nand can retain that amount each month.<\/p>\n\n\n\n

The important thing however is to ensure that all sources of income \nand all family expenses are listed on the statement. When the IVA is \naccepted by creditors it is a little bit late to realize that a certain \nrecurrent expense item has been overlooked. It is the debtor\u2019s \nresponsibility to ensure that this does not happen and to make sure that\n the insolvency practitioner who is acting as nominee includes all \nreasonable expenses in the I&E statement in the IVA proposal.<\/p>\n\n\n\n

It is obviously essential that all\n sources of income are included: wages, salaries, housing benefits, \nchild benefit, tax credits, pensions, dividends and interest earned on \nsavings accounts, lodger rental or other income from letting property \nand so on. Household or family income should include the income of both \npartners and the contributions of any non-dependent children to the \nhousehold budget. Income should be net of all taxes and national \ninsurance deductions and any mandatory contributions to pension schemes.<\/p>\n\n\n\n

Spending should include all\n reasonable living expenses. Start with the \u2018must pay\u2019 bills such as \nmortgage or rent or cost of lodgings and car HP. Next summarize all food\n and housekeeping expenses for the family and the cost of utilities such\n as water, gas and electricity.<\/p>\n\n\n\n

Then list all the normal items of expenditure one by one: council \ntax, water rates, telephone, mobile, internet, sky, TV license, life and\n property insurances, vehicle costs (fuel, parking, car insurance, car \ntax, repairs & servicing), medical optical & dental costs, \nclothing & footwear, costs incurred by children (school meals, \nschool trips and activities, sports & hobbies, pocket money, \ntransport), laundry & dry cleaning, hairdressing, newspapers & \nmagazines. If you have a pet you must allow for insurance & upkeep. \nIf you smoke, then unless you are sure you are giving up the habit, this\n expenditure must be listed. Modest contributions to church or charity \nshould be included if applicable. Any special unavoidable expenses (e.g.\n special diet for a family member) should be included. Last but not \nleast, an appropriate amount should be included for sundries & \nemergencies, as already highlighted above.<\/p>\n\n\n\n

There are guidelines available from creditors which detail and limit \nthe amounts allowable under each heading. Your insolvency practitioner \nwill advise you in regard to these limits. Should you genuinely exceed \nany particular limit, then your IVA proposal must provide a reasonable \nexplanation for the excess with appropriate back up evidence if \nnecessary. Creditors will normally accept such expenditures when \nexplained truthfully and rationally.<\/p>\n","protected":false},"excerpt":{"rendered":"

A good proposal for an Individual Voluntary Arrangement or IVA will have at its heart a sensible, realistic and well constructed Income and Expenditure Statement or I&E.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-1524","post","type-post","status-publish","format-standard","hentry","category-iva-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/1524","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=1524"}],"version-history":[{"count":4,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/1524\/revisions"}],"predecessor-version":[{"id":2002,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/1524\/revisions\/2002"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=1524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=1524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=1524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}