IS DEBT DESTROYING YOUR LIFE?
DO THOSE BILLS KEEP MOUNTING UP?
DON’T KNOW WHICH WAY TO TURN?
DEBT CAN LEAVE YOU FEELING ISOLATED & ALONE...
...WE HAVE BEEN THERE - DON’T SUFFER ON YOUR OWN!
If you need help we can provide it for
Counselling Service also available on a
one to one
EVERY Wednesday night
at the Methodist Church Eynesbury
We can get your life back on track just come and see us - Don’t feel ashamed.
Check out our website or send an email message and we will get
back to you.
LAD sponsored by:
Telephone: 01480 477200 or email: email@example.com
LIFE AFTER DEBT – LIFE AMID DEBT - AN INTRODUCTION
L.A.D is the brainchild of Ann Fryer, a mother of three from Eaton Socon. The idea
began to gel when, realising how alone she was in the face of overwhelming fear
when extortionate interest rates suddenly jumped to 10.5% after a 2yr fixed rate
finished in October 2008, after facing repossession of her house in 2005, so she
enlisted the help of the media.
After appearing on the front cover of a local paper Ann was contacted by another
local woman who was in a similar position. It was then that the idea for the new
Charity began to bear fruition. Finding that many of her friends and acquaintances,
from all walks of life had experienced differing types of financial difficulty Ann
encouraged them to ‘volunteer’ with the setting up of L.A.D which Ann successfully
did. The group was formed in June 2009.
There are now twelve people involved, either as Trustees or part of the Management
Committee, and they offer such skills as, training, counselling and debt management,
Charitable status is currently being sought and will be of enormous help in gaining the
The main aims of L.A.D. are to offer support, advice and training to enable individuals
to cope with the traumatic and emotional side of debt and the recovery from debt
process, and of course just being there to TALK to which is all quite often someone
wants to do share the burden and having someone to listen to them with no
judgement or stigma attached.
Lad is now being recognised we have been very encouraged by the support offered by,
Eynesbury Methodist Church, BBC Look East live broadcast, BBC Radio Cambridge
live broadcast, The Hunts Post, Crier News, Luminus and the
local Member of Parliament, Jonathan Djanogly, Papworth News & Views, PE19
Magazine, Hunts Forum plus local Councillors. The Villager Magazine published by
Nigel and Priorities St Neots,
Most recently the group appeared on About Anglia regional TV.
We also had a visit from Mark Howell a District Councillor from Papworth who is
interested in the group and gave us some useful contacts.
Funding awarded to us from Friends of Muir, and The Cooperative.
Debt support group hopes for solid base
HELPING HANDS: Steph and Ann
The founder of a debt support group is hoping to establish a permanent building to help people
with financial worries.
Ann Fryer, 50, established the Life Amidst Debt and Life After Debt group in St Neots in 2009.
Since then the group, which offers emotional support to people who have debt issues, has met on
Wednesday evenings at the Methodist Church in Eynesbury.
But after recently employing fundraiser Steph Dennis, Ann now hopes enough money can be raised
to find the group a permanent base.
Ann, of Queens Gardens, Eaton Socon, said: “There is a stigma with debt, people are ashamed of
it. But what is bad is that so many people just bury their heads in the sand and think the problem
will go away. But it won’t.”
For more information, call Ann on 07504 382919.
Age Concern MoneyTrail www.ageconcern.org.uk/moneytrail
Age Concernwww.ageconcern.org.uk Tel: 0800 00 99 66
Benefits inc ESA
rt/Illorinjured/DG_171896 0800 055 6688.
Business Debtline www.bdl.org.uk Tel: 0800 197 6026
Childline www.childline.org.uk Tel: 0800 1111
Cruse www.crusebereavementcare.org.uk Tel: 0844 477 9400
CSA www.direct.gov.uk/en/Parents/ChildMaintenance 0845 713 3133
Day by Day helpline
Dial UK www.dialuk.info Tel: 01302 310 123
Drinkline Tel: 0800 917 8282
For legal advice for women
Free housing advice helpline
TaxAid www.taxaid.org.uk Tel: 0845 120 3779 TV Licensing www.tvlicensing.co.uk)
Tel: 0844 800 6732 (general enquiries
Free interactive guide for working people to planning ahead for retirement
Gamblers Anonymous www.gamblersanonymous.org.uk Tel: 020 7384 3040
Gamcare www.gamcare.org.uk Tel: 0845 600 0133
Advice on gambling issues
Gingerbread www.gingerbread.org.uk Tel: 0800 018 5026
Help the Aged www.helptheaged.org.uk Tel: 0808 800 6565 Senior line
Lone Parent Helpline www.loneparenthelpline.info Tel 0800 018 5026
for advice on maintenance, benefits and money
HM Customs and Revenue Child tax credit and Child Benefit 0345 300 3900
Information and advice on issues affecting older people
Information and support on mental health problems www.mind.org.uk Tel 0845 766
Money Saving Expert. http://www.moneysavingexpert.com
National Domestic Violence Helplinewww.refuge.org.uk
Relate www.relate.org.uk Tel: 0845 1 30 40 16
Rights of Women www.rightsofwomen.org.uk Tel: 020 7251 6577
Samaritanswww.samaritans.org Tel: 0845 790 9090
Saneline www.sane.org.uk Tel: 0845 767 8000
Shelter www.shelter.org.uk Tel: 0808 800 4444
Tel: 0808 2000 247
USEFUL CONTACT NUMBERs
USEFUL CONTACT NUMBERS
Utility Warehouse www.utilitywarehouse.co.uk Tel 0844 8157777
USEFUL TIPS TO SAVE YOU MONEY
Do not auto-renew insurances-shop around.
Consolidate Credit Cards as normally 0% deals.
Only pay the minimum payment amount.
Cut up Credit Cards, cheque books and use a debit card. (Barclays offer Debit Card
Contact bank to reduce Overdraft at a fixed monthly rate you can afford.
Shop around for Utility providers.ie Utility Warehouse they shop around for you.
Fill Car to max with Fuel when you can
Use “OWN BRAND” Goods when shopping
Save Club Card/Nectar points
Check if you are entitled to Benefits
Child Tax Credit/Working tax available to people under £42,000.
Child Benefit is available to children up until their 19th Birthday and up to the end of
their academic year.
Start shopping for Christmas early to spread the cost. Plus it’s usually cheaper to buy
food etc in advance. Do not use Credit Cards.
Write a shopping list and stick to it.
There are a lot of complications when you go bankrupt especially if you inherit money
before you are discharged. You will loose any money that is left to you, or you win.
Before you go Bankrupt ensure you ask the relevant people to adjust their wills during
your period of BankruptcDo not ignore debt letters or bills if you contact companies
straight away you can negotiate up to 50% discount on debt. If you can’t face calling
them LIFE AFTER DEBT can do this for you as long as we have your permission to talk
to them on your behalf. We can also open letters and write letters to set up payment
terms either by giving your bank details, debit card number or arranging payment
books or Postal Order payments.
Pay off O/D with Savings as O/D costs more than you make on savings
Insure your buildings for the rebuild not the market value
Sit and go through all comparison websites on all Bills
Piggy Bank Savings
Treat going through finances like a job, spend quality time looking on internet to shop
for a better deal.
Go to Martin Lewis website to pick up tips on saving money. If you don’t have a
computer then try to get to a library it will be worth it in the end.
How they can help
The Trust awards grants to:
Clear domestic gas and electricity debts
Clear other priority debts (known as Further Assistance Payments
Purchase essential household items (known as Further Assistance
Further Assistance Payments
The following are examples of the types of Further Assistance
Payments you can apply for.
Council Tax Debts - Payment will only be considered in the
most exceptional circumstances. Applications must always
explain the history and current stage of enforcement.
Other Utility Debts - Payment may be considered where you can
show that clearing these debts will enable you to budget better
for your current bills. You must attach a copy of your most
recent bill or demand for payment showing the up to date
balance on your account. In the case of utility arrears, the bill
must be based on actual usage, estimates cannot be accepted.
Telephone Debts - Payments for these debts may be considered
where there is a serious social or medical need for the phone to
remain connected or to be reconnected. Such a need must be
supported by evidence from someone like your GP, health
visitor or social worker.
Household items - Payments for items such as cookers,
washing machines or refrigerators may be made where a
special need for the item is shown. We will need a letter from
an appropriate professional, e.g. health visitor, social worker or
advice worker, confirming your need. If you need the item
because of illness or disability in your family, you will also need
to send us proof of that illness or disability. The Trust should
not be seen as an alternative to Social Fund Community Care
Boiler Repairs / Replacement - Payment will be considered in
exceptional circumstances, particularly where supporting
letters from appropriate professionals confirming the need are
provided. Quotes for the work will need to be provided prior to
an award of a grant and work commencing.
Bankruptcy Deposits / Debt Relief Orders (DRO) - Applicants
must not have previously been declared bankrupt nor be a
home owner. They must provide a full list of debts and have
received advice from a professional advice worker or
intermediary. Bankruptcy applications will not be considered
from those with assets above a value of £1,000 and total debts
less than £15,000. DRO applications MUST include the ID
number generated from the Insolvency Service's online
application process. Please click here for the Bankruptcy &
Funeral expenses - A payment may be considered where
outstanding funeral expenses are causing hardship.
Applications should indicate whether a payment has been
received from the Social Fund towards those funeral expenses.
Please tell us your relationship with the person who has died
and why the estate of the deceased is unable to pay the funeral
Rent debts - Payment will only be considered in the
most exceptional circumstances. Applications must always
explain the history and current stage of proceedings and
provide supporting documentation.
Items the Trust cannot help with
The Trust cannot give you a loan or give you help with bills you
have already paid or items you have already bought. The Trust
will also not help with:
Fines for criminal offences
Overpayments of benefits
Educational or training needs
Business debts. Debts to central government departments e.g. tax
and national insurance
Catalogues, credit cards, personal loans and other forms of non-
Medical equipment, aids and adaptations
Deposits to secure accommodation
EDF Energy Trust
PO Box 42
Peterborough PE3 8XH
Tel: 01733 421060 Fax: 01733 421020 Email: firstname.lastname@example.org
The EDF Energy Trust is administered on behalf of trustees by Charis
PERSONAL INFORMATION FORM
Type of Financial Problem
Feed back about your experiences of LAD.
How had LAD helped you overcome your financial difficulties
ACTION PLAN CALENDAR
ACTION PLAN CALENDAR
DEBT GUIDE AND INFORMATION
Use this guide to find essential information about debt, including ways to reduce debt
and how to get help if you're having debt problems.
How do I know if my debt is a problem?
How can I manage my debt?
What are my options for controlling or reducing my debt?
Where can I get debt advice and information?
How do I know if my debt is a problem?
If you're starting to feel overwhelmed by your debts, you're unable to pay them off, or
there's an increasing risk of being taken to court by the people that you owe money to
(your creditors), then you should think about seeking professional advice to help you
get control over your debt.
Being in debt means dealing with difficult emotions as well as keeping up with your
repayments, so it's best to take control of your debt situation now.
How can I manage my debt?
Debt management is about acknowledging how much debt you're in. Some debts can
be dealt with by budgeting carefully; other larger debts may need a more formal debt
solution. To start with, you need to work out a budget based on how much you earn,
how much you owe and all your essential expenses. Your budget will show you how
much disposable income you have.
If you're spending too much on your monthly utility bills, paying too much interest on
your credit cards or losing out on benefits or tax savings, there are lots of small
adjustments you can make to your lifestyle to save money.
For more advice on how to reduce your monthly outgoings, take a look at our article
on budgeting or for further advice on how to get control of your debts, read our article
on getting out of debt in 7 steps.
If you can't afford the minimum repayments to your creditors with your current
income, or if you're in a cycle of borrowing more money to repay your debts, then it
may be time to seek advice on formal debt solutions that can help you get back in
What are my options for controlling or reducing my debt?
If you're looking for help with finding a formal debt solution, finding the most
appropriate way to get control of your debt depends on various factors:
How much secured or unsecured debt you have in total
Your income and you’re spending
Who your creditors are and the amount of priority debts that you have
Whether you already have a County Court Judgement against you
How much the debt relief method will affect your current employment status and your
The various ways to take control of overwhelming debts and work towards debt
freedom are listed below. Many of these options have consequences for your future
credit record once you are debt free, so it's important to seek professional advice as
soon as possible.
Bankruptcy - Bankruptcy is a court order that you can apply for to free yourself from
overwhelming debts so that you can make a fresh start. An advantage of bankruptcy
is that you don't have to deal with the people you owe money to (your creditors),
however the main disadvantage of bankruptcy is that you may lose your home and
other valuable assets to free up money to pay off your debts. Read more
Debt Relief Orders - If you're on a low income and you have less than £15,000 in
qualifying debts you may be able to apply for a Debt Relief Order. A DRO normally
lasts a year, during which period you won't have to make any payments to creditors
listed in the order, and those creditors won't be able to take any action against you.
Read more about Debt Relief Orders.
Individual Voluntary Arrangements - An Individual Voluntary Arrangement (IVA) is a
formal agreement that's set up by an independent professional between you and your
creditors. With an IVA you come to an arrangement with people you owe money to and
pay off a percentage of your total debt. After 5 years your debt is typically classed as
settled. Read more about Individual Voluntary Arrangements.
Administration Orders - If your debts amount to less than £5,000, you can apply for an
Administration Order. This means that you make a monthly payment to the court,
which then makes arrangements to pay off your creditors. Your creditors won't be
able to take action against you while the order is in place. The court takes 10% of
your payments as a handling fee to cover costs. Read more about Administration
Debt Management Plans - A Debt Management Plan is an agreement with your
creditors to repay your debts in monthly instalments. With a DMP interest and charges
may be frozen, but you may also have to pay a fee if you use a debt management
company to arrange the plan. Find out more about Debt Management Plans.
Debt consolidation loans - A debt consolidation loan reduces the pressure of dealing
with many creditors as it combines all your loans into one. Debt consolidation loans
usually mean that you pay a lower interest rate, but it may take you longer to get out
of debt as you may pay your debt off over a longer period of time. It is important to
note that you should only consolidate your debts if you are sure you will be able to
afford the repayments, because otherwise you risk getting deeper into debt. Read
more about debt consolidation loans.
If you're in debt it's good to seek professional help as well as doing your own
Administration Order - For debts lower than £5,000. The County Court administers
payments to all your creditors. Creditors cannot take any more action against you and
interest is stopped.
Arrears - When you haven't paid your utility bills, your mortgage, rent or council tax, or
missed the payments on your credit card or loan on unsecured debts these sums are
known as 'arrears'.
Assets - These are all the valuable items you own including your house, vehicle and
possessions such as furniture.
Bailiffs - If you owe money to creditors, they can instruct bailiffs to enter your
property and take away goods to cover the value of your debt.
Bankruptcy - This is a legal procedure that writes off all your debts. Bankruptcy is one
of many ways to deal with debts you can't pay
County Court Judgement (CCJ) - When you haven't been able to pay your debts to your
creditors. CCJs are a way for creditors to claim the money they're owed through the
courts. The Court then decides whether there really is a debt to pay.
Creditor - This is the person to whom money is owed.
Debt consolidation loan - If you need to pay off debts, this loan brings all your debts
into one loan. These allow you to make one payment a month instead of many. This is
often done to get a lower interest rate.
Debt Relief Order - A Debt Relief Order is a new way for those who have relatively
little debt, few assets and a low income, to manage their debt situation.
Debtor - A debtor is obliged to repay a debt to a person they owe (known as a creditor)
Disposable income - This is the amount of money that's left over, or available for
spending, after utility bills, taxes and mortgage payments
Equity - This is the difference between the debt claims that are held against a
property and its market value. Equity is the difference between the amount
outstanding on any mortgage or secured loan you may have and the market value of
Hire purchase - This is a way to pay for valuable items over a fixed period (such as
furniture or electronic goods) and in regular instalments. The vendor owns the goods
until the final payment is made.
Individual Voluntary Arrangement - This is a flexible alternative to bankruptcy where a
voluntary arrangement is made with creditors through the courts.
Insolvency practitioner - A qualified and recognised specialist who deals with people
who are in debt.
Official receiver - A person who deals with administration for people who are
bankrupt. They decide whether assets should be sold for the creditors' benefit.
Priority debts - Debts that must be paid urgently, often to avoid penalties. Priority
debts include: rent or mortgage payments, gas and electricity bills, council tax,
Magistrates fines, Inland Revenue / VAT payments.
Secured debt - Money borrowed which has been secured against a particular asset
such as a house, a car or valuable furniture.
Unsecured debt - Credit cards and store cards debts are examples of unsecured
debts, because they aren't tied to a specific asset or a property.
DEBT CASE STUDIES
After a separation from my ex husband I found it a struggle to make ends meet as he
had always turned to credit to plug the gap and had left me to deal with the debt he
I owed over £50,000 to five different creditors, which meant I needed to pay about
£1,200 a month just to meet my obligations to my lenders. Despite coping with a
family on my own, I also had a part-time job as well. My income from that, together
with child support and tax credits, gave me a take-home pay of just over £1,600 per
month while I also lived in a 4 Bedroom house that cost £900 a month which I could
I then found out about Life after Debt after seeing a report in a local paper and
contacted then as I could not get any help from my family or ex husband. I spoke to
Ann about my problems and she arranged to come and see me.I needed help with
budgeting and to deal with all my creditors my ex husband left me to deal with and My
Mortgage Company. Life after Debt gave me advice and the emotional support I
needed and helped me how to manage my money better through drawing up a monthly
budget to take care of all the essentials: rent, food, heating, light, fares to school and
clothes etc. They helped me by opening letters that I had dreaded to open and gave
me support by contacting my creditors. I had to move from my house which was very
traumatic but with the emotional I support received from Ann and the Life after Debt
team I was able to move into my rented house.
By making allowances for bills which may be charged quarterly or annually such as
utilities or the television license, I found that I did had enough money for me and my
children to live on as well as repay my creditors via an IVA.
The key to financial freedom
Ann said to me 'It can be very difficult for people with busy lives to spare the time to
assess their financial position properly but often some simple budgeting tips are all
that are needed to make the difference between being locked into financial hassle or
having the key to financial freedom.'
'I managed to get out of debt without losing my home.'
Mr A. Chisholm separated from his partner four years ago, which left him with only
half the household income he was used to. As a result he was unable to finance his
mortgage or the payments on his hire purchase car without relying on credit. By the
time he spoke to an adviser he had unsecured debts of almost £32,000.
What Mr Chisholm did
Realising his debt situation wasn't improving; he went to the Citizens Advice Bureau
to get some advice on dealing with his debt. They referred him to a Grant Thornton
His adviser helped him to consider his options carefully:
He decided that a Debt Management Plan wouldn't suit him because there would still
be the threat of legal action and he wanted to put a stop to the phone calls from his
He didn't choose bankruptcy because he was aware that any payments made in
bankruptcy would be used in fees and costs with very little going to his creditors.
Bankruptcy would also put his car at risk of repossession.
Mr Chisholm had considered proposing an Individual Voluntary Arrangement (IVA) to
his creditors but he didn't think it would be possible due to his low income.
How the adviser helped
after he talked to the adviser from Grant Thornton it became clear that an IVA was
possible after all. The adviser noticed that the payments on his car were due to finish
later that year, which meant that his contributions to his IVA would be able to
increase later on.
A success story
Mr Chisholm is now paying a highly affordable monthly amount by direct debit starting
at £90 a month and rising to £231 when the hire purchase agreement on his car is
complete. He's allowed to keep his home and his car, but most importantly, he's now
in control of his debts.
'I thought that I'd never be able to pay off my debts successfully'
Ms LJ Green's debts started when she took maternity leave after the birth of her son .
She found it tough to cope on her reduced income, so she supplemented it with credit
cards and loans.
In order to make ends meet, she returned to part-time and then eventually full-time
work, but she still couldn't get control over her debt. By the time she contacted a
Grant Thornton adviser, her unsecured debt was over £16,000.
Considering the options
When Ms Green got in touch with Grant Thornton, she wasn't sure what option would
be best to help her deal with her debt.
She didn't want an informal Debt Management Plan because she felt she wouldn't be
able to cope with the continuing reviews, the threat of legal action, or ongoing
interest and charges.
She had a little too much debt to consider a Debt Relief Order.
Bankruptcy seemed to be the most appropriate way to deal with the debt, but she'd
struggled for so long to meet her responsibilities, she was reluctant to give up.
Bankruptcy could also have a long-standing impact on her credit file, preventing her
from getting a mortgage in future and could also have had impact on her
How it was resolved
Ms Green didn't think she would be able to get an Individual Voluntary Arrangement
(IVA) because she had such a low income. One of Grant Thornton's client service
managers noticed that Ms Green had put aside an allowance for childcare. These
payments would be reduced later in the year as her son was going to start nursery,
freeing up more money for monthly repayments, which meant that an IVA would suit
her needs after all.
Choosing an IVA meant that Ms Green was able to stay in control of her debt with
affordable monthly payments of £30.00 for the first 6 months, followed by 12 monthly
payments of £180.00 rising to £250.00 for the remaining 42 months of her five year
'Getting out of debt didn't mean we'd have to lose our home'
Mr and Mrs Watts ran into debt after Mr Watts was made redundant and struggled to
find a new job. He returned to his old job on a lower salary four months later, but by
then they'd started using credit cards to supplement their reduced income.
Luckily Mr Watts had income protection to cover minimum monthly payments to many
of his creditors, but their debt still mounted up. Eventually they approached a Grant
Thornton adviser with unsecured debts of over £80,000.
Considering the options
A Debt Management Plan wouldn't suit them because not all their creditors would
suspend interest and charges indefinitely. It would also take too long for them to pay
off their debt and they would always be at risk of legal action.
Bankruptcy was an option, but with no third party funds available it would almost
certainly result in the loss of the family home.
They decided to proceed by proposing an Individual Voluntary Arrangement (IVA),
which dealt with all of their unsecured debts in a manageable way that meant they
could still keep their house.
The IVA resulted in an affordable, secure and flexible scheme of monthly payments
that keeps the family home safe while allowing Mr and Mrs Watts to concentrate on
'Controlling our debt repayment has made us a happier family'
Mr and Mrs Abbott had debts of over £50,000 and they were falling short of being able
to pay their mortgage by several hundred pounds every month.
Various family members were helping them with their essential living costs, but the
tension was mounting and their relationship was beginning to fall apart under the
As threats of legal action from creditors increased, they realised that the situation
was becoming unsustainable and contacted Grant Thornton.
What they decided to do
At first, Mr and Mrs Abbott seriously considered bankruptcy. They were prepared to
lose their home, because they felt that the peace of mind of being debt free was more
After speaking to Grant Thornton, they decided that proposing an Individual Voluntary
Arrangement (IVA) to their creditors would be a better option, based on the
understanding that they would offer the proceeds from the sale of their house towards
The creditors approved their arrangement, and Mr and Mrs Abbott even managed to
keep £4,000 of the sale price of their house to help them relocate.
How they took control of their debt
Mr and Mrs Abbott got control of their debt, prevented legal action and found a house
Now that they don't have to pay their mortgage, they're living with a manageable
budget and they're able to concentrate on enjoying a happy family life.
All names and some details have been changed to protect customers' identities.
New legislature means debtors will be given £10 a month to spend for three years. But
critics say this serves only to extend their misery
Is it fair that someone who has been declared bankrupt is able to go to the pub or the
gym, buy gifts and enjoy meals out – or should they only be left with enough money to
pay their household bills and meet other necessary expenses?
The answer probably depends where you sit on the spectrum of opinion regarding
bankruptcy: "bring back debtors' jails and workhouses"; "they've been through hell
and deserve compassion"; – or somewhere between the two.
It's a debate that will continue to rage following the introduction in the UK of rules
which state that bankrupt individuals must hand over all their "disposable income" to
their creditors for three years and can no longer keep any of it for themselves.
Previously, many will have paid just half to the people they owed.
On the face of it, the regime will mean no pints down the pub (unless someone else is
buying), no cigarettes, and no visits to the golf club.
One commentator claims the new guidelines, which came in very quietly, mean
bankrupts face "three years of misery", putting them at greater risk of further
financial problems or mental health issues. Meanwhile, someone claiming to work for
the government's Insolvency Service contacted Guardian Money to say the policy is
"causing real distress" to vulnerable people.
But the Insolvency Service defends the changes, saying it is all about "striking a
balance". It told Money: "We are not saying [to bankrupts]: we want you to live on
gruel and wear threadbare clothes. This is a reasonable approach." And it says each
member of the household will be allowed £10 a month spending money – so perhaps
an occasional pint isn't completely out of the question after all.
The rules concern the payments those who are bankrupt, and who can afford it, make
to the people to whom they owe money. When a bankrupt individual agrees to make
regular payments to his or her creditors, it is called an "income payments agreement"
(IPA). If they don't play ball a court can issue an "income payments order" (IPO) that
forces them to hand over money. While bankruptcy usually lasts for 12 months, an
IPA/IPO normally runs for three years.
Officials will look at your finances to decide how much you should contribute. They
will deduct "reasonable" domestic expenses – mortgage or rent, utility bills etc – from
your income, and then see what is left over.
Previously, bankrupts would typically pay 50%-70% of their disposable income to their
creditors for three years. In other words, he or she could keep hold of a decent chunk
of the money left over every month.
But the new Insolvency Service guidelines state: "Normally you will be expected to
pay all of your disposable income every month as your IPA or IPO payment. So the
more disposable income you have, the more you have to pay." Another official
document puts it more bluntly: "The bankrupt no longer retains any of the remaining
surplus income once all their reasonable household expenditure is accounted for."
Rent or mortgage payments that are appropriate for where you live and the size of
your family, plus heating and lighting, are all likely to be deemed reasonable
expenses, the Insolvency Service says. So are food and clothing – though,
presumably, posh grub from Harrods and expensive designer togs would be frowned
upon. Other things likely to be allowed – and items that are likely to be disallowed
unless there are special circumstances – are listed in the accompanying panel (below
There has also been another change. For all new IPAs (and IPOs), if the debtor's
surplus income, over and above what they need to live on, is £20 a month or more
officials will look to take this for their monthly payments. Previously, £50 a month was
the lowest amount sought. That could mean many more bankrupts having to cough up.
One of those sharply critical of the new regime is Neil Faulkner. Writing on the
lovemoney.com website, he says: "Bankrupts now face a typical three years of misery
… forcing them under crisis to consider unlicensed loan sharks, and discouraging hard
work or productivity. The net result of this badly calculated new policy is likely to be
Meanwhile, the anonymous individual who wrote to us about the distress this is
supposedly causing says: "The previous policy gave some notion of freedom of choice
– i.e., a bankrupt could spend their surplus on a gym membership. Now they have no
share of the surplus, so effectively being made bankrupt means you are not able to go
to the gym for three years."
Graham Horne, deputy inspector general of the Insolvency Service, says it had been
keen to bring its policies in line with what happens with individual voluntary
arrangements, which allow people to restructure their debts and avoid bankruptcy.
"It used to be that the bankrupt could retain a surplus over and above what he needed
to live on. That didn't seem fair to creditors," he says.
Horne points to the fact that bankrupts and their dependents will be granted an
"allowance" of £10 a month to cover "sundries and emergencies". So a family of four
would have £40.
Asked about the gym membership example, Horne says: "I'm not totally sure creditors
would be that happy that someone might be going to the gym when they should
arguably be using that money to pay towards their debts." However, they could
always spend their £10 on going to their municipal gym.
What's reasonable...and what isn't
Things that are likely to be allowed as reasonable domestic expenses include
appropriate rent/mortgage payments; council tax; utility bills (gas, electricity, water,
landline); food, toiletries and cleaning products; travel; clothing and footwear; plus:
A TV licence
Buildings and contents insurance
Car tax, motor insurance and breakdown cover (assuming you've been allowed to
keep your vehicle)
A mobile phone - within reason
Membership of a professional body that is needed for your job
Prescriptions, dental treatment and optician costs
Childcare, such as after-school clubs, provided the parents work
Things that are unlikely to be allowed unless there are special circumstances include:
Money for alcohol, cigarettes or gambling, as "these should not be funded at the
expense of the creditors"
Gym membership, any "sports expenses" or club membership
"Excessive" mortgage payments
Regular payments to charity
Private healthcare insurance
Additional pension contributions
Family holidays and pet-related costs (food and vet bills) will be considered
individually, but the guidelines say these are "not allowable unless [it is] to cover [a]
reasonable domestic need. The most a family of four is likely to get for a holiday is
With Petrol expected to reach £2 per litre by end of 2011 these tips may come in
Only buy or fill up your car or truck in the early morning when the ground temperature
is still cold.
Remember that all service stations have their storage tanks buried below ground. The
colder the ground the more dense the petrol, when it gets warmer petrol expands, so
buying in the afternoon or in the evening....your litre is not exactly a litre. In the
petroleum business, the specific gravity and the temperature of the petrol, diesel and
jet fuel, ethanol and other petroleum products plays an important role.
A 1-degree rise in temperature is a big deal for this business. But the service stations
do not have temperature compensation at the pumps.
When you’re filling up do not squeeze the trigger of the nozzle to a fast mode
If you look you will see that the trigger has three (3) stages: low, middle, and high.
You should be pumping on low mode, thereby minimizing the vapours that are created
while you are pumping. All hoses at the pump have a vapour return. If you are pumping
on the fast rate, some of the liquid that goes to your tank becomes vapour. Those
vapours are being sucked up and back into the underground storage tank so you’re
getting less worth for your money.
One of the most important tips is to fill up when your Petrol tank is HALF FULL. The
reason for this is the more Petrol you have in your tank the less air occupying its
empty space. Petrol evaporates faster than you can imagine. Petrol storage tanks
have an internal floating roof. This roof serves as zero clearance between the Petrol
and the atmosphere, so it minimizes the evaporation. Unlike service stations,
here where I work, every truck that we load is temperature compensated so that
every litre is actually the exact amount.
Another reminder, if there is a petrol truck pumping into the storage tanks when you
stop to buy Petrol, DO NOT fill up; most likely the petrol is being stirred up as the
Petrol is being delivered, and you might pick up some of the dirt that normally settles
on the bottom.
Net Salary £
Job Seekers Allowance £
Income Support £
Working Family Tax Credit £
Child Tax Credit £
Child Benefit £
Retirement Pension £
Invalidity Sickness Benefit £
Non-dependant’s contribution £
Income from Lodgers £
School meals £
Childcare/Nursery fees £
TV Licence £
TV/Internet provider £
Prescriptions/Health Care £
Vehicle insurance £
Vehicle tax/MOT £
Please provide full details of the £
Loan Repayments £
Is your bank account overdrawn? £
Council Tax £
Telephone - Landline £
- Mobile £
Buildings & contents
Pension/Life Cover £
Court Fines £
TOTAL EXPENDITURE £
Office 01487 832253
Zip Computers were one of the forerunners in bringing pc repairs to home users at
affordable cost. A very popular facility offered was the completely 'no fee walk in pc
diagnostics clinic', believed to be the first of its kind in the country at a time when
repairs were prohibitively expensive.
Office 01487 832253
Mobile 07847 533240
Mobile 07847 533240