Tuesday, 30 August 2011 08:40

Income And Expenditure Forms For An IVA Or Debt Management Plan Written by  Jon

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How do you complete the income and expenditure form for an IVA or debt management plans?

Income and Expenditure Forms For An IVA or Debt Management Plan

In completing the forms in order to place your debts in a debt management plan or IVA, the one form used that many people have a lot of questions regarding is the income and expenditure portion.  One of the reasons for this is that people are unsure as to the amounts they should put down for their living expenses.

I’m here to demystify it all for you.... just put down what it actually costs you each month for the various expenses listed.  If there is a category for an expense that you do not spend on, leave it blank.  If you have an expenses that is not represented on the form, which would be rare, add it in.

Simple really, the form is to be an accurate portrayal or picture of your current finances.And if you review the form(s) itself it takes into account quite a few expenses.  You can put down a small amount each month for haircuts, and even for a holiday.

The second part of this is that your creditors are going to review this form and if anything seems out of the ordinary or high in what you are spending they can question it.  The creditors may disallow any expenses as well, but that would only be if the expense was frivolous or something not needed.  That is also why it is important to have someone assist you with the forms, as they can review your expenditures and advise if something may be questioned or not.

If a creditor were to disallow an expense, you can question them on this and if need be provide documentation/proof that this is a needed expenses and have them review it again. If a creditor does question an expenses that may seem high to them, you can show them exactly what it is costing you for this expense by providing documentation, such as a receipt or whatever else form(s) may be needed.

In some areas of the country the rents are higher than others, London for example, so someone’s rent in the London area may be much higher than say someone in the north.  This is just what it is costing that person to live and it is understood about the differences.

As for the income portion, you are expected to list all the income that you have coming into the household; this includes any benefits and pensions, wages, etc.  An accurate picture of your finances is what you need to show.  If all you have are benefits coming in, then an IVA is not an option, and a debt management plan may not be suitable as well.

Why is such a detailed income and expenditure form completed?

One reason is to see if you are living within your means, and another is to see if you have any surplus of income each month to be able to sustain payments into a repayment plan.


Once all your income is totaled up and once all your expenditures are added up, they will look to see what you have left each month.  This is what will determine the best repayment plan for you.  If you can afford to fund an IVA, then this may be the better solution.  Or it may be that you can pay something towards the accounts, but not enough for an IVA and a debt management plan is the better option for you.

So while many times people want to know the exact amounts they should put down for their expenditures, or what is the maximum they can put down, it is always best to list what exactly you are spending for each expenses each month, being as accurate as possible.

Jon

Jon

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