One of the most important things to get right if you are planning to start an Individual Voluntary Arrangement (IVA) is your living expenses budget. If you get this wrong the amount you have to pay into the Arrangement could be too high.
There are two critical elements involved with creating your budget. Firstly you must ensure you include all the items you will need to pay for. Secondly you must apply a sufficient but reasonable amount to each item.
What items can be included in your IVA living expenses budget?
You must include all of the items you need to run your household in your IVA living expenses budget. Some of these will be regular payments which you can easily identify from your bank statement. Things like your mortgage or rent payments, your council tax payment and your utility bills.
Other items are not so easy to identify. They may be made up of multiple payments which vary from month to month. For example your food and petrol budgets. In addition some items are easy to miss as they are not paid regularly. These include things like car maintenance and amounts for dental and optical expenditures.
Get a copy of our IVA Living Expenses Guide
To get an accurate view of which types of expenses you should include in your IVA Living Expenses Budget and the amounts you should be spending on each you should get a copy of our living expenses guide.
The guide is free and lists all of the different types of expenditures you should consider when completing your monthly budget. It also gives hints and tips about the budgets which you will have to stay within to ensure that they are acceptable to your creditors.
To get the guide please use the “Download Living Expenses Guide” button top right of this page or (at the bottom if you are using your mobile).
How to use the IVA Living Expenses Guide?
The guide must be used for guidance purposes only. There is no “one fits all” living expenditure list. The amounts you include against each of your expenditure items must be reasonable in the context of your particular circumstances.
BE Tip: If there are legitimate reasons why you spend more than the amounts suggested you should use your own figures. It is important that the amounts you include are sufficient for your needs. However remember that your creditors will review your budget carefully. You may be asked to justify any unusual figures and revise them if creditors feel they are too high.
Once you have put together your living expenses budget you should speak to one of our experts who can help you decide whether or not it is reasonable and if an IVA is a sensible solution for you.