A Fistful of Frugal

hands playing rock, paper, scissors - A Fistful of Frugal

Hi budgeteers and welcome to another edition of a Fistful of Frugal. Today’s post shares five recent frugal things in our lives. Let’s get to it.

Frugal Exercise/Leisure Time

Last Friday Mr B and I took a long walk through a nature reserve we’re lucky enough to enjoy, almost on our doorstep.

We witnessed low-flying geese, heard many birds singing their little hearts out, discovered new plants, met friendly dogs along the way, and drank in the gorgeousness of the sunny, Spring day.

Blue sky with white clouds - A Fistful of Frugal
Photo by Lisa B at Bunchy the Budgeteer

On Saturday we dragged out our bikes from the shed for the first time this year and set off for a long (for us) bike ride to explore a new area built on what used to be the airfield.

The sky was bright blue, and the ride was both interesting and relaxing (even if we were saddle-sore by the time we returned home!).

The photos throughout this blog post are snaps I took on the bike ride – another free hobby of mine.

Man on bicycle in barren setting - A Fistful of Frugal
Photo by Lisa B at Bunchy the Budgeteer

Frugal Dinners

We’ve changed the way we plan our meals and how we buy food. Right now we’re experimenting, but so far we seem to be saving money doing things this way.

Instead of planning our meals for the week and buying the ingredients needed to make said meals, we’re now only going to the shops when we can no longer do without something, whether that’s a food item or a toiletry item. When we need to go shopping we go, but only then do we buy items we’re both low on and/or need.

Shopping this way has made us Mr B more creative with making dinner and we’re using things up before buying more stuff. Whether we’ll continue this way, I don’t don’t know, but so far so good.

Graffiti of 'always love' - A Fistful of Frugal
Photo by Lisa B at Bunchy the Budgeteer

Frugal Entertainment

Most days I listen to podcasts on my favourite topics (finance and intentional living) and now use a new podcast app called Podbean. I use Bluetooth headphones (I’m on my second pair!) and love how I can listen to my favourite podcasters while I’m on the move.

Podbean is FREE and has great features. You can download the app from both the Play Store and the App Store, depending on whether you use Android or Apple.

Graffiti of 'love you', heart and smiley face' - A Fistful of Frugal
Photo by Lisa B at Bunchy the Budgeteer

Frugal Holiday

We booked our first holiday in a few years!

We’d planned to go abroad this year to celebrate 2018 being the year we celebrate both five years of marriage and 10 years being a couple, but that didn’t work out due to not having enough in our holiday savings to visit the country we’re desperate to explore next; Norway.

The plan now is to spend a week in Cornwall and go to Norway next year instead. After that, unless we can increase our income, holidays won’t be on the cards for the foreseeable future. Investing into our retirement plans is our priority.

So, what did we do to save money on holidays?

Well, for one, instead of me booking the Cornwall accommodation through the third-party booking site and paying a booking fee, I made a direct payment to the owners of the accommodation, using their website.

As we’re going to Cornwall by train, not only did Mr B and I take time to play with different travel times and use a fair-splitting tool (several fair-splitting websites are available), we bought advanced tickets and renewed our Two Together Railcard (using a discount code found online!).

Banksy-style graffiti of cat - A Fistful of Frugal
Photo by Lisa B at Bunchy the Budgeteer

With our renewed railcard we can use it for days out, etc, saving further money down the line (no pun intended).

Although we didn’t have enough Tesco Clubcard points to make use of this deal, there’s a great deal available for getting 50% off a Two Together Railcard here.

Stop sign in a bush - A Fistful of Frugal
Photo by Lisa B at Bunchy the Budgeteer

Frugal Dining Out

Mr B took a week’s holiday the first week of April and though there wasn’t much ‘play’ money to spend, not only did we enjoy our local food festival, where we each got both a savoury and a sweet treat, we bagged a great bargain at Pizza Express.

By us each installing the Pizza Express app we each were eligible to receive a FREE Classic pizza, so one afternoon we went in, received a delicious pizza each and ordered a FREE jug of tap water for the table and didn’t order dessert (we only wanted water and couldn’t manage dessert!). The bill came to a grand total of £0, but we left a small tip. What a fantastic deal!

* Get your free pizza here.*

Bike gloves holding handlebars - A Fistful of Frugal
Photo by Lisa B at Bunchy the Budgeteer

Have you been frugal of late? Do you have any tips on money-saving activities you’d like to share?

For more frugal tips read A Fistful Of Frugal – Beauty Edition and A Fistful of Frugal – Bathroom Edition.

I love hearing from people who want to improve their finances and/or simplify their lives. Don’t be shy! Comment, contribute to the Facebook page, or send me a private message.

Until next time.

Bunchy x

If you think this article (or any of the posts on the blog) would help or interest anybody, please share. You can even pin to Pinterest! Just hover over the left-hand corner of the image below and click the red ‘P’ icon.

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Photo by Lisa B at Bunchy the Budgeteer

Disillusioned About Blogging

Laptop with stickers all over - Disillusioned About Blogging

I didn’t post last week because, to be frank; I became burnt out and jaded. I became disillusioned about blogging.

When I began this blog, the primary reasons were as both a creative outlet for myself and due to wanting to help educate people on how to better manage their money.

I want to offer readers the best experience within my financial power (i.e. not much) and so spent hours upon hours of precious time reading the endless material available online outlining the things that, as a blogger, I’m ‘supposed’ to do, which resulted in losing my style of writing and, along the way, I somewhat ‘lost myself’ too, if that doesn’t sound too dramatic!

Social Media Nightmare

Then comes the hardest part; to get the blog to new readers.

With millions of blog posts being written every day, the chance of people just stumbling upon Bunchy the Budgeteer without me using multiple social media platforms and the constant promotion of each post, several times a day, my readership is tiny compared to my blogging peers.

I became overwhelmed and wondered what was the point.

I needed to step back from the blog, so I focussed on other things last week. Here’s what that week allowed me to realise:

I’m Not Even Planning on Monetising the Blog, so What’s the Massive Rush or Worry of How Many People Read It?

These days, an increasing number of people are hoping to give up their full-time jobs and replace their income by having a blog. The truth is, this only happens for a small percentage of bloggers and can take years to achieve.

Work office - Disillusioned About Blogging
Photo by Venveo on Unsplash

Are you wondering how you make money from blogging? Here are the main income earners:

  • Having adverts on your blog.
  • Being an affiliate for products and services.
  • Getting paid by brands to review and recommend their products and services.

Here are the reasons I don’t see myself doing those things:

  • I hate advertising and don’t want you to have to put up with obtrusive adverts, either.
  • I struggle to believe a stranger recommending a product or service when I’m aware they’re sponsored by the brand, so how could I expect any of YOU to trust I’m being authentic if I were to recommend products or services to you? You don’t know me (apart from my readers who are friends and family – Hi, friends and fam!) so how can you trust me?
  • I’m in receipt of a disability benefit and, though I CAN earn a small amount on top, per week, I want this to be from freelance writing and not from this blog.
Road sign with figure of man and sticker of word 'trust' over his head - Disillusioned About Blogging
Photo by Bernard Hermant on Unsplash

This Blog Began as a Pleasure for Me

I want this blog to be of help to people with their money and their lives, no matter how small the impact and no matter how small my readership, but I want it to be enjoyable for me, too.

I can’t allow myself to get overwhelmed by what I MUST do to be ‘successful’. Gary Vaynerchuk, you’re great, but to spend hours each day on social media for greater reach instead of doing something I feel is meaningful? Nah, bruv.

I’ve had my semi-rant on becoming disillusioned about the blogging world, so thanks for listening!

And Breathe…

With that said, I’ve decided I’ll be more selfish with my blog now. I’ll only cover topics I want to cover, which will now include more on simple living and contentment. Whoever this helps along the way, fantastic! What’s the point if it doesn’t help others?

You should also hear my writing ‘voice’ come through more now. My posts may not appear as edited from this point, but they’ll be the rawer, deeper version of me, which can only be a good thing. With too much sameness out there already, I’m not adding to it.

I’ll still share stuff on social networks, but may delete certain platforms and will no longer be posting multiple times a day.

Person sat under the stars wearing top with 'anti-social social club' on the back - Disillusioned About Blogging
Photo by Leio Mclaren on Unsplash

The Hippy Bit

See, unlike money, time’s the only resource we can’t earn more of, save, or grow. I’m now 40 and I’m damned if I’ll waste whatever left I have of my precious time, staring at my screen doing anything other than what’s good or productive for me and those I love. I won’t take up any more of yours, either.

Shut your screen off, play with your children, walk your dog, read a great book, make love, or tell somebody how much they mean to you.

Until next time.

Bunchy x

I love hearing from people who want to improve their finances and/or simplify their lives. Don’t be shy! Comment, contribute to the Facebook page, or send me a private messageI’ll always try to help you.

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If you think this article (or any of the posts on the blog) could help anybody, please share. You can even pin to Pinterest! Just hover over the left-hand corner of the image below and click the red ‘P’ icon.

Our March 2018 Budget Report

Laptop and smartphone with pink flower - Our March 2018 Budget Report

It’s time for me to share with you our March 2018 budget report.

I know I say it every time, but I’m always so shocked when yet another month has passed. The first quarter of this year has vanished!

March was a month of financial ups and downs, but with careful spending, we ended the month with two home-delivered pizzas (via an online deal, naturally!).

For new readers: I use percentages, instead of monetary amounts. This is both to respect my husband’s wish to keep our income private and in case you want to compare how much of your income goes to your own categories. As your income will be different to mine, percentages are more helpful.

Our March 2018 Budget Report

Income

Mr B’s wages were much lower this month. This was due to several days where his workplace didn’t have enough work and sent employees home. If he doesn’t work, he doesn’t get paid.

Then we had two snow days and he more than likely missed at least one day due to a persistent health issue (for which he’s awaiting further tests). I can’t remember. In total, Mr B brought in around 28% less than usual!

We received a wonderful surprise though, in the form of a monetary gift from a family member who received a small windfall and wanted us to put the gift towards our holiday for this year!

We tried, over and over, to refuse the money (we’re not good at receiving monetary gifts due to our fierce independence), but too much refusal can cause offence and this person got real joy from giving to us, so we accepted with great thanks. This accounted for 16% of our final income.

Another mini-boost of 0.5% of our income came from either being told to ‘keep the change’ after helping family members out when shopping for them (again, we always refuse this!) and the unexpected coins upon the ground!

Despite these income boosts, our March income came in at 11.5% lower than average.

March Calendar - Our March 2018 Budget Report
Photo by Charles Deluvio on Unsplash

Outgoings

(Shown in percentages of March’s total income, rounded up or down to keep things simple).

  • mortgage: 24%
  • Council Tax: 0%

Our Council Tax gets paid via Direct Debit over 10 months. In February and March, we don’t have to pay a thing, which helped this month!

  • gas and electricity: 3.6%
  • water: 2.5%
  • groceries: (Includes food, toiletries, and household needs.): 7.4%

We came in below our grocery budget limit this month. When this happens, we roll the surplus into next month’s grocery budget because our grocery budget is tight. Should we be trying to pay off debts, we’d instead add any surplus to debt payments.

  • internet and landline: 1%
  • life assurance: 1.4%
  • mobile phone bills: 0.5%
  • my dental insurance: 0.6%
  • mortgage overpayment: 0%
  • pensions (besides to the small automatic deduction from Mr B’s wage): 0%
  • sinking funds: 13% put into our short-term savings.
Gift-wrapped box with tag - Our March 2018 Budget Report
Photo by Annie Spratt on Unsplash

From our sinking funds this month, we bought:

– screen wash for the car (and today I found screen wash, hidden away in a cupboard!).
– two greetings cards (I used to always make them, but have lapsed this year).
– Mothering Sunday gifts (a plant and chocolates).
– birthday money for one of our nephews
– a meal for two of our nieces to celebrate one of them turning seven!
– teaspoons
– batteries for our smoke detectors

  • holiday savings: (‘vacation’ to U.S. readers) 17%
  • petrol: 1.5%
  • miscellaneous buffer: 0.8%

We spent 93% of our miscellaneous buffer. Here’s how:

– pizza (home delivery)

– a flapjack Mr B bought at work.

– our remaining ‘bonus’ (for completing our six months worth of expenses emergency fund last month) went towards our share of a meal with our nieces, as I’ve mentioned.

– two taxis to work for Mr B (one was an icy day where he wasn’t happy for me to drive and the other was a day I was unwell).

  • personal spending money: (which has to cover clothing, haircuts, makeup, and gifts for each other on special occasions): 4%
Ice-cream and popcorn - Our March 2018 Budget Report
Photo by Toa Heftiba on Unsplash

In March my personal money went:

– towards an overage on my mobile phone usage (the main cost comes from the joint account).
– to my savings pot for Mr B’s birthday
– clothing savings
– vape juice
– to my general, personal savings (that cover the *cost of running this blog).
– on a bakery treat for Mr B and I.
– buying a drink whilst out shopping (I forgot to bring my flask).
– on junk food (crisps and chocolate either for myself or for myself and Mr B).
– towards our half of the meal with our nieces as mentioned before (our remaining ‘bonus’ from the ‘misc’ category didn’t cover our share).

When looking at your spending each month, remember that your life and requirements will be very different to ours. I share our budget to give you insight into how we budget in the hope it may give you ideas for your own budget if needed.

So, how was March for you? How do you divide up your money each month? Do you need to make a budget?

Read:

Are You Within the Recommended Guidelines for Your Monthly Expenses?, Things You Need to Know Before Making Your First Budget, and Easy Budgeting for Overwhelmed or Lazy People.

If you think this article (or any of the posts on the blog) could help anybody, please share. You can even pin to Pinterest! Just hover over the left-hand corner of the image below and click the red ‘P’ icon.

Painted Eggs - Our March 2018 Budget Report

I love hearing from people who want to improve their finances and/or simplify their lives. Don’t be shy! Comment, contribute to the Facebook page, or send me a private message. I will always try to help you.

Lisa aka Bunchy

*This post has an affiliate link to the company used to host my blog. If you want to start a blog but aren’t sure which hosting service to choose, hence my link to Siteground. Their customer service has been outstanding as has their technical support. If you sign up via the link, I’ll receive a small commission at no extra cost to you (you’ll get a great discount!). Don’t worry, I’d only ever recommend things from which I get true value.

Easy Budgeting for Overwhelmed or Lazy People

Table with notepad, pen, spectacles, mug of tea, and smartphone - Easy Budgeting for Overwhelmed or Lazy People in 5 Simple Steps

Hi, budgeteers! Here’s a new post about budgeting: ‘Easy budgeting for overwhelmed or lazy people’! Does that sound like something you could use?

I’ve already written one in-depth post about budgeting, but it was quite detailed and gave lots of options.

The thing is, I’m still getting people telling me they need advice on budgeting.

I’ve been thinking about it. Many people are either too busy, overwhelmed, or lazy to make a detailed budget. Also, not everyone enjoys it as I do! P.S. The laziness comment isn’t a judgement. I could win an award for laziness many days of the week!

This isn’t the way we budget our money, but it could work for lots of people who want something simple.
So, how it works…

Easy Budgeting for Overwhelmed or Lazy People in 5 Simple Steps

Now, you might be working on a monthly basis, or you may prefer to budget weekly. Whatever you decide, alter what I’ve outlined to suit YOUR needs.

1) Work out how much your income is each month.

2) Write down all the bills you HAVE to pay. For example:

  • mortgage
  • council tax
  • utilities
  • loan /credit card repayments, etc

or those bills you’ve chosen to commit to, such as:

  • TV subscription
  • gym membership
  • children’s’ clubs and activities, and so on.

This is a good time to decide if you want to cancel any of these things (if you can) and trim down your outgoing expenses.

Subtract this money from your income.

When you’re planning your budget, don’t forget those bills that you might pay once a year. Things like annual car insurance payments or boiler servicing.

Will you treat these like monthly bills and ‘pay yourself’ a regular amount to put by for when the bill arrives?

Example: Your car insurance is £300 a year and you pay it in September.

  • £300 divided by 12 months is £25 a month.
  • You save £25 a month so when September rolls around – boom! – you’ve got the money to pay the bill outright without taking a massive chunk of your income that month.

Put these types of savings into a savings account, or at least separate current account so you don’t spend it.

Easy Budgeting for Overwhelmed or Lazy People Pinterest

Staying with the scenario that an annual car insurance bill of around £300 is due this September. You’re only now deciding to save for it this way. Now you have two choices:

i) Divide £300 by the number of months you have left before the bill is due. That’s what you have to put by each month.

ii) Continue to save £25 a month, knowing that when September arrives, you’ll have to make up the difference from September’s income.

Does that make sense? Please say if not!

3) Decide how much is a realistic amount needed for food, other groceries, and transport (fuel, buses, etc).

Looking back at what you’ve been spending in the past helps. Do you have the evidence in the form of receipts, bank statements, etc?

Subtract this money from your income, also.

4) Identify what your most important financial goal is right now. It might be:

  • building an emergency fund
  • paying off debt
  • saving for a deposit for a flat
  • investing for retirement

Now decide what is a realistic amount of money you’re committed to saving each month to move you towards your goal. Automate these savings.

You’ve covered your main bills and you’ve decided what is a realistic amount to save or pay off debts. Now there’s no reason not to set up a regular bank transfer each month. Out of sight, out of mind, my friend.

It's amazing how fast money gains momentum. You'll feel fantastic seeing your savings stack up or your debt going down.Click To Tweet

Also, subtract this money from your income and you’ll have an amount left (assuming your outgoings aren’t greater than your income).

5) Spend the rest on whatever you want/need.

In steps 2-4 you dealt with all your bills, essentials, savings or debt-repayment goals. You now don’t need to track or record your spending!

Once it’s gone, it’s gone, but you’ll know you’ve covered the necessities of life and THAT is a great feeling.

This is a simple way you can budget. If I can ever work out an even simpler way, I’ll get back to you!

I hope this post has been helpful for those of you that don’t want to track every penny in and every penny out or break everything down into smaller spending categories (unlike people like me, who are money nerds and enjoy it!).

Let me know what you think. Is this something you could work with? Are you going to give it a try? Please report back and tell me how it went!

If you think anybody else would find this useful, please share (I’ve made it so easy for you to do). The aim of this blog is to reach and help as many people as possible with their money-management.

I love hearing from you and want to grow a community of people interested in improving their finances and simplifying their lives. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.

Lisa aka ‘Bunchy’

‘A Fistful of Frugal’ – Bathroom Edition

Close up of a fist | Frugal homemade cleaning tips

After writing lots of heavy articles on debt, we could do with a shorter and easier read. This lead me to realise that despite beginning a series called ‘A Fistful of Frugal‘ (five frugal things Mr B and I do), I’ve added no further posts to the series.  So here’s Instalment two of ‘A Fistful of Frugal‘ with frugal, homemade cleaning tips. This is the bathroom edition.

I keep things as simple as possible with my cleaning products. Where possible I want them to be:

– cheap
– effective
– natural
– environmentally-friendly

Depending on the week, sometimes we fail at meeting the criteria, but we try our best given our available money and time.

Most of the products I use are homemade and perfect for everyone even if you’re skint. They’re the way our grandmothers used to clean.

Once I’ve written fu

Most of the products I use are homemade and perfect for everyone even if you're skint. They're the way our grandmothers used to clean.Click To Tweetrther posts on other do-it-yourself, cheap ways we keep our home clean, I’ll aim to put them together as an ‘Ultimate Guide‘ to natural, budget-friendly home cleaning. I’ll include instructions on how to make awesome, ‘green’ and frugal cleaning products of your own.

Another thing I love about the products we use is that most of them are non-toxic and safe enough to eat (not that I’d recommend eating a pot of bicarbonate of soda or drinking a bottle of white vinegar – yuk!).

To know I wouldn’t be in a mad panic if a spill occurred or if children or animals were to get hold of my alternative cleaning items is reassuring.

I hope that by sharing what we use and find effective, gives you ideas for cleaning your own bathroom frugally.

 

Five Frugal Ways We Save Money on Cleaning the Bathroom

Woman's shape through a shower curtain | Frugal homemade cleaning tips
Photo by Steinar Engeland on Unsplash

A Frugal Way to Clean the Shower Curtain

We don’t use the shiny plastic ones and so we throw our shower curtains in the washing machine once a month. If we neglect to wash them and any trace of black mould occurs, I fill the bath with water (enough to cover the shower curtain) and add a slug of bleach and let the curtain soak for a while. Later, I rinse the shower curtain and wash in the washing machine and hang to dry. I’m aware that bleach is terrible for our environment and, though I seldom use it, it’s the one ‘nasty’ product that’s remained. Once this bottle is empty I’m switching to using hydrogen peroxide!

Outdoor WC | Frugal homemade cleaning tips
Photo by Amy Reed on Unsplash

A Frugal Way to Clean the Toilet

I use a spray bottle (re-purposed from a nasty chemical-filled product), filled half and half with water and white vinegar. If you’re worried the water will grow bacteria, boil the water first and allow to cool. Other people use distilled water. I spray the loo (cistern, lid, seat, etc) with the mixture and wipe clean.

For cleaning the toilet pan, I use a good old toilet brush, that sits in a mixture of water, liquid soap, and vinegar. (Remember: soap is soap, so use whatever. Washing-up liquid, bubble bath, etc, is fine). To prevent the growth of bacteria, change the liquid in the toilet brush holder often.

I give the pan a quick scrub around with the loo brush every day. Once a week I chuck a cup of bicarbonate of soda around the pan, add vinegar (which reacts to create a foaming action) and let the foam sit for a while before scrubbing and flushing away. Once I buy the hydrogen peroxide, I’ll use it instead of bleach.

U.S readers will know bicarbonate of soda as ‘baking soda’.

Legs under water in bathtub | Frugal homemade cleaning tips
Photo by Karla Alexander on Unsplash

A Frugal Way to Clean the Bath and Wash-Basin

Every day I try to spray (the same trusty vinegar spray used for our loo) and wipe around the top of the bath (the flat surfaces where your products might sit) with a microfibre cloth. This keeps everything looking presentable.

Once a week I use liquid soap (if the bathtub is grimy I mix bicarb with the liquid soap to make a paste) around the inside of the bathtub and clean with a micro-fibre cloth. Then I rinse with water. I use this same procedure for cleaning the wash-basin and fittings (taps, shower heads, and shower hoses).

For deep cleaning the taps, shower heads, and shower hoses, I use an old toothbrush and the liquid soap and bicarb paste mixture. They come up great. For removing limescale I use straight white vinegar on the fittings and leave them soaking in the vinegar before rinsing.

Small bathroom | Frugal homemade cleaning tips

A Frugal Way to Clean the Floor

I use a steam mop. It doesn’t involve chemicals and the floor dries fast. We had to buy the steam mop, but we did our research and bought one with good reviews, in the lower end of the price range and waited for a sale. Before we owned a steam mop, because our bathroom is tiny, I would get on my hands and knees and clean with my vinegar spray and microfibre cloth. It took seconds to clean but wasn’t always easy for me.

Bathroom mirror on chest of drawers | Frugal homemade cleaning tips
Photo by Logan Ripley on Unsplash

A Frugal Way to Clean the Mirror and Windows

We use hot, soapy water (again, don’t worry what liquid soap you use, but I use washing up liquid) and a micro-fibre cloth. To make sure they’re as streak-free as possible with minimal effort, we use our second-hand window vacuum. This has been a game-changer. Before owning the window vacuum, preventing streaks meant using dry micro-fibre cloths to make sure we were removing as much moisture as possible.

Do you have any frugal, homemade cleaning tips? What’s the most effective, frugal and/or natural cleaning product you use in your bathroom? If you use shop-bought cleaning products, would you consider making your own? Are you unsure if homemade cleaners are effective? If you have any thrifty cleaning hints, tips, recipes, or hacks’, please share with us!

Check out instalment one of A Fistful of Frugal’ – the Beauty Edition.

Pinterest pin cover for fistful of frugal bathroom edition

I love hearing from you and want to grow a community of people interested in improving their finances and simplifying their lives. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.

Lisa aka ‘Bunchy’

Our February 2018 Budget Report

Candle in heart-shaped case - February monthly budget report

It’s time for me to share with you our February 2018 budget report. How can March be here already?!

Things may have been easier for you in February, compared to last month. What do you think? Have you recovered from Christmas? Maybe you organise your money so you’re saving for Christmas throughout the year? Perhaps you don’t go over a set Christmas budget either? Let me know. If you’re not doing these things, why not start now?

Here in the UK, it’s only got colder, so heating costs are up for many of us. Last month I submitted our meter readings and our projected energy bills are much higher than our current direct debit, but we’re hoping that once Winter is over, things will even out. I’m tempted to put extra by each month so that when I come to review energy providers again (which I do at least once a year), should we leave this current provider, we won’t get stung by a big bill.

Are you interested in switching to an energy provider who sources electricity from 100% renewable sources? If so, drop me a message or email with YOUR email. By referring you we both receive a £20 Love2Shop voucher!

We set our thermostat to fall no lower than 17 degrees centigrade during the day and no lower than 15 centigrade between 9 pm to 6 am. Sometimes we need to increase the temperature in the evenings (and weekends when we’re home) if we’re feeling cold. We make sure we’re wrapped up well at home and if we’re sat still, we’re almost always under a blanket or quilt. I often use a hot water bottle too but the heating still has to get turned up.

We try to time things so that the times we need to crank up the temperature is the same as when we’re drying laundry indoors. There are almost zero days through the Winter when it’s realistic to dry the laundry outdoors and we won’t use a tumble dryer, so we hang our laundry on the radiators and an airer. This works well for us.

Laundry on outdoor clotheslines - Our February 2018 Budget Report
Photo by Karen Maes on Unsplash

Anyway, onto our February 2018 budget report…

For new readers: I use percentages, instead of monetary amounts. This is both to respect my husband’s wish to keep our income private and in case you want to compare how much of your income goes to your own categories. As your income will be different to mine, percentages are more helpful.

Our February income got a 2.5% boost because we sold our old dishwasher at last!

Back in November, we bought a cheap, secondhand, slimline dishwasher (it was taking too long to fill up a full-sized one and we choose not to own a large amount of crockery) to replace our original one. The reason the dishwasher took so long to sell, is that Mr B now only lists things on eBay’s occasional £1 selling fee days, which saves money. We also got messed around by an earlier ‘buyer’ on eBay, but Mr B re-listed it on the next cheap listing day and it sold to somebody who wasn’t a time-waster. Yay!

Mismatched crockery - Our February 2018 Budget Report
Photo by Brooke Lark on Unsplash

Our February 2018 Budget Report:

(Shown in percentages of February’s total income, rounded up or down to keep things simple).

  • mortgage: 22%
  • council tax: 0%

Our Council Tax gets paid via Direct Debit over 10 months. In February and March, we don’t have to pay a thing. Whoop, whoop!

  • gas and electricity: 3.3%
  • water: 2.3%
  • groceries: (Includes food, toiletries, and household needs.): 7.8%

We were a little under in our grocery budget in February. When this happens, we roll the surplus into next month’s grocery budget because our grocery budget is tight. Should we be trying to pay off debts, we’d instead add any surplus to debt payments.

Groceries bags on bicycle handlebars - Our February 2018 Budget Report
Photo by Guus Baggermans on Unsplash
  • internet and landline: 0.9%
  • life assurance: 1.3%
  • mobile phone bills: 0.5%
  • my dental insurance: 0.5%
  • mortgage overpayment: 0%
  • pensions (besides to the small automatic deduction from Mr B’s wage): 0%
  • savings: 29%

This should have gone into investments, which will either be our pensions, or a new investment vehicle (after researching them more). Instead, we left it in our current account to be a full month ahead of our monthly expenses.

We didn’t need to spend from our sinking funds in February!

  • holiday savings: (‘vacation’ to U.S. readers) 8.2%
  • petrol: 1.1%

Tesco had an offer whereby if you spent £60 on groceries in one shop, you received 10p off per litre of petrol. We did this and though we didn’t put in any more fuel into the car, what we bought cost less than it should’ve. Win!

Petrol pump - Our February 2018 Budget Report
Photo on Sara Farshchi Unsplash
  • miscellaneous buffer: 2.5%

It isn’t usual for us to put this much of our budget to our miscellaneous category, but this month we added extra to have money to treat ourselves for reaching our savings goal last month of having six months worth of expenses saved.

We spent 63% of our miscellaneous buffer on a takeaway pizza one night, a cheap, but delicious lunch out on Sunday (with a generous tip), and biscuits (cookies to US readers) discounted due to being short-dated!

  • personal spending money: (which has to cover clothing, haircuts, makeup, and gifts for each other on special occasions): 7.8%

I’ve not yet told you where our personal allowances go every month, but a reader was interested…

I asked Mr B, but he doesn’t track his personal spending unlike this nerd here, but he said his personal money goes on vaping, haircuts, (and occasional beard trims), and food treats (junk food) for us. He saves each month for my birthday and will save for himself if he has something specific he wants. He likes to buy tech products online and, while he pays for that by selling tech he no longer wants, he still has to pay Post Office costs.

Circuit board - Our February 2018 Budget Report
Photo by Nicolas Thomas

In February my personal money went:

  • to my savings pot for Mr B’s birthday.
  • to my savings for clothing.
  • in buying vape juice.
  • to my general, personal savings (that cover the *cost of running this blog)
  • paying for two makeup items.
  • paying for a taxi to work for Mr B one day in February.

(I felt exhausted and whilst we could’ve paid for it from our joint account, I’m hard on myself when it’s not an illness that prevents me from driving Mr B to work, so I wanted to cover the cost.)

Woman sat on jetty, looking out onto water - Our February 2018 Budget Report
Photo by Kalen Emsley on Unsplash

When looking at your spending each month, remember that your life and requirements will be very different to ours. I share our budget to give you insight into how we budget in the hope it may give you ideas for your own budget if needed.

So, how was February for you? Are your heating bills much higher right now? What other ways do you keep yourself warm? How do you divide up your money each month? Do you need to make a budget?

You may like to read:

A Peek into Our Monthly Budget, which is the template we use each month, Are You Within the Recommended Guidelines for Your Monthly Expenses? and Money – Where on Earth Should I Begin?

If you think this article (or any of the posts on the blog) could help anybody, please share. You can even pin to Pinterest! Just hover over the left-hand corner of the image below and click the red ‘P’ icon.

Pinterest pin for blog post - Our February 2018 budget report

I love hearing from you and want to grow a community of people interested in improving their finances and possibly simplifying their lives. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.

Lisa aka ‘Bunchy’

*This post has an affiliate link to the company I use to host my blog. You may want to start a blog but aren’t sure which hosting service to choose, hence my link to Siteground. Their customer service has been outstanding as has their technical support. If you sign up via the link, I’ll receive a small commission at no extra cost to you (you’ll get a great discount!). Don’t worry, I’d only ever recommend things from which I get true value.

Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy

Padlocks on a chain-link fence - Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy

This series covers five possible solutions for tackling crippling debt.

So far, we’ve looked at Debt Management PlansAdministration OrdersIndividual Voluntary Arrangements, and Debt Relief Orders

In the final part of the series, I’ll be covering Bankruptcy.

I’ll explain what is and for whom it may be suitable. You’ll find out what you’d need to do to apply for bankruptcy, and what going bankrupt may mean for you.

For a brief explanation of Bankruptcy, watch this video from debt charity Stepchange.

What Is Bankruptcy?

Bankruptcy is a legal procedure and a form of insolvency that can write off most debts.

It’s only suitable if you can’t pay back your debts in a reasonable time and your financial circumstances are unlikely to change soon.

To be considered for bankruptcy, you don’t have to have a minimum amount of debt.

Bankruptcy rules in England and Wales vary to those in Scotland or Northern Ireland. In this article, I’ll focus on the rules governing England and Wales.

For residents of Scotland, look at this page by The Money Advice Service and this page by Accountant in Bankruptcy (Scotland’s insolvency service).
Residents of Northern Ireland will find suitable information here.

The bankruptcy period usually lasts for one year.

The Official Receiver informs you of when your bankruptcy period has finished and you’ve been discharged.

After the bankruptcy order ends, the debts included in your bankruptcy get written off/cancelled.

During, and after your bankruptcy, your creditors (the people you owe money to) can’t contact you and must stop most types of further action against you to recover the money owed to them.

If you took out any of your debts via fraud, although your creditor can’t chase you to pay while you’re bankrupt, the debts themselves aren’t written off at the end of the bankruptcy period, leaving you liable to repay them after your bankruptcy ends.

Though bankruptcy may be a suitable debt solution for you, it comes with several financial restrictions you must follow and may affect many aspects of your life.

As with any debt-management, you should discuss it with an expert debt counsellor. You’ll find resources at the end of the article.

The two main alternatives to bankruptcy are Individual Voluntary Arrangements and Debt Relief Orders.

Woman under water - Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy
Photo by Christopher Campbell on Unsplash

Full Criteria for Applying for Bankruptcy

As well as not being able to pay your debts and not expecting your financial circumstances to change in the foreseeable future, to apply for bankruptcy you must fulfil the following criteria:

  1. Live in England or Wales.
  2. Carry out business in England or Wales.
  3. Have done either 1 or 2 in the past three years and live in another European state. (Denmark isn’t included).
  4. Own few belongings of value.
  5. Have little/no equity in your home.

How Do I Apply for Bankruptcy?

You need to ‘petition for bankruptcy‘.

Making yourself bankrupt is known as ‘voluntary bankruptcy‘.

To do so, you need to complete an application form known as The Debtor’s Petition. You can find that here.

Residents of Scotland and Northern Ireland can find the respective relevant application forms here and here.

It’s important to include full details of property and possessions you own. You may face a fine or imprisonment.If you make any false statements on the form or try to hide evidence of property,

An Official Receiver from the Insolvency Service, supported by a staff of Case Examiners, will administer your bankruptcy.

Computer mouse - Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy
Photo by Harpal Singh on Unsplash

Can I Be Forced to Go Bankrupt?

Your creditors can start bankruptcy proceedings against you, but to do so, you’d have to owe them at least £5,000. This is the last resort for your creditors because they have to pay the court fees for you. Most creditors only consider doing this if they’re sure you have enough assets or income to guarantee the bankruptcy will get them their money back.

Your individual debts may be less than £5,000, but collectively they could take you over the limit, and although rare, sometimes your creditors may come together to petition for your bankruptcy, to get their money back.

For your creditors to start bankruptcy proceedings against you, they give you, in person, a document known as a Statutory Demand. This is a written warning informing you that your creditor will begin bankruptcy proceedings if you don’t pay your debt or come to an agreement with them.

Once issued with the Statutory Demand, there will be 21 days before your creditor begins proceedings. This is to give you time to either settle the debt in full or come to an agreement on how you’ll pay.

In rare instances, a creditor can start proceedings without issuing you with a statutory demand:

– after you’ve had an Individual Voluntary Arrangement (IVA), which failed.
– because the creditor used bailiffs or enforcement agents to collect a debt, who discovered you own nothing of value.

Aside from the creditors having to pay the fees instead of you, If a creditor applies for your bankruptcy, the effects on you are the same as if you made yourself bankrupt.

A court hearing will take place, and if you don’t think you should be made bankrupt, you can argue your case.

Man looking out across cityscape - Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy
Photo by Eric Ward on Unsplash

Does It Cost to Apply for Bankruptcy?

To apply for voluntary bankruptcy, you must pay a total fee of £680, which you won’t get back unless you cancel the application before it goes into force. This fee comprises an adjudicator fee of £130 and a deposit of £550.

You can pay, either online or at a designated bank.

If you pay online, you can pay in instalments of as little as £5. if you pay in cash, at a bank, then you can’t pay in instalments and must pay the fee in full.

If you’re struggling to pay the fee to apply for bankruptcy, you may be able to get help from a debt charity, but it’s likely to delay your application.

To seek help with fees, look at the Turn2us website.

There may be other ongoing costs throughout your bankruptcy, which will get paid from any spare income or assets you may have (known as the ‘bankruptcy estate‘). These costs may include:

  • solicitors fees
  • fees of the trustee
  • the cost of selling your home (estate agents’ fees, etc).
  • any other bankruptcy administration costs.

If there’s not enough money or belongings of any value in your bankruptcy estate, you won’t need to pay these added costs.

If your income is high enough, you must make payments towards your debts for three years. This may come via an Income Payments Agreement or Income Payments Order. If your only income is from government benefits, you won’t get asked to pay any of this towards your debts.

Stack of chocolate coins - Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy

What Happens Next?

With your fees paid and your application submitted, the next step is to wait for the Insolvency Service adjudicator’s decision. They have 28 days to decide. If they need further information from you, they get a further 14 days to make their decision.

Should your application for bankruptcy get rejected, you can ask for a review. If the adjudicator still rejects your application, you can make an appeal to the court. To do so, you must send the N161 form to your local court dealing with bankruptcies.

Reasons the adjudicator might reject your application include if they believe you have enough savings to resolve your debt issues or you have access to pension savings that are larger than your debts.

If your application gets accepted, the bankruptcy order gets made, and you’re declared bankrupt.

Within two weeks of the bankruptcy order being made, you’ll hear from the Official Receiver. They’ll arrange an interview with you, which can often take place over the phone.

Your money will come under the control of the Official Receiver, which may take several days to happen, but, straight after you get declared bankrupt, your bank or building society accounts get frozen with immediate effect.

It’s important not only to withdraw enough money to get by before this occurs but you must organise a way to receive money and pay bills.

Joint bank accounts get frozen too, but The Official Receiver or trustee will decide how much of the money in the account to release to the joint account holder.

The Official Receiver will oversee the administration of your bankruptcy, including having to distribute any money or property to your creditors.

You must work with the Official Receiver (or an appointed bankruptcy trustee) throughout the administration of your bankruptcy.

After your interview, the Official Receiver will inform your creditors of your bankruptcy and send them a report of your financial circumstances.

Once bankrupt, your creditors aren’t allowed to contact you to ask for payment. If they do, you should inform the Official Receiver.

Your name and details of your bankruptcy get added to the Insolvency Register, which is a national register of bankruptcies available to the public.

Sometimes you can ask that your details aren’t included (e.g. victims of violence).

As long as you co-operate with the Official Receiver or bankruptcy trustee, you’ll get discharged from your bankruptcy after 12 months.

Gold pocket watch - Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy
Photo by Nic on Unsplash

Which Debts Can I Include in Bankruptcy?

Debts you can include in your bankruptcy include:

  • benefit overpayments (unless fraudulent).
  • catalogue debt
  • credit card debt
  • overdrafts
  • store card
  • utility bill arrears

Even if you forget to list a debt in your bankruptcy application, it will still get added.

Mortgages and secured loan debts will get added to your bankruptcy if you relinquish the keys to your home (known as ‘surrendering your property’), or if your house gets repossessed.

Table with notebook, glasses, tea, and smartphone on - Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy
Photo by Mariya Pampova on Unsplash

Which Debts Can’t I Include in Bankruptcy?

Bankruptcy will write off most of your debts, but a few won’t be included:

  • child maintenance arrears (if arranged by the CSA or Child Maintenance Service).
  • court fines
  • court orders telling you to pay compensation to someone for personal injury.
  • criminal fines, compensation orders and victim surcharges from a magistrates’ court or Crown Court.
  • debts you take out after your bankruptcy order.
  • fraudulent debts, for example, benefit fraud.
  • mortgages and other debts secured against your home if you want to keep the house.
  • other secured debts, such as debts secured by a charging order.
  • payments ordered by a court as part of family proceedings, for example in divorce cases.
  • payments a court has ordered you to make under a confiscation order, for example, for drug trafficking.
  • Social Fund loans
  • student loans
  • TV Licence arrears

If any of these non-included debts apply to you, you must work out how you will keep paying them. Throughout your bankruptcy period, the creditors for these debts can still contact you and take further action should you not repay them.

Are Joint Debts Included in Bankruptcy?

A joint debt is one you and somebody else applied for at the same time. It has both of your names in the credit agreement.

You can include joint debts in a bankruptcy but this will impact the other person on the credit agreement because the debt won’t get cancelled.

Although at the end of your bankruptcy period you’ll get discharged from the debt, the debt reverts to being in the other person’s name only, meaning they’re responsible for paying it.

The creditor can take action against them even if they’re unemployed. If you go bankrupt at the same time, you’ll avoid this issue.

If you do this, you’ll each need to complete separate forms and pay separate fees.

Unless you’re business partners too, you can’t apply for a joint bankruptcy and must petition for individual bankruptcy.

Woman's hands with engagement ring, holding a mug - Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy
Photo by Fox Otter on Unsplash

Is Joint Bankruptcy Possible?

Joint bankruptcy is only available for business partners as long each partner agrees.

Will I Have to Sell My Home?

If you own any assets, such as property or vehicles, the official receiver or bankruptcy trustee may order the sale of them to pay your creditors.

Apart from the basics needed for daily living and working, you may have to relinquish other possessions too.

If you’re in arrears with your mortgage payments, entering bankruptcy won’t stop your mortgage lender trying to repossess your home.

Should your home get repossessed, and the sale doesn’t bring enough money to pay off the mortgage (and any other secured debt), the remaining debt will no longer be a secured debt.

Due to this, you’ll get released from the debt when your bankruptcy period is over, even if the sale of the property occurs after your bankruptcy period has finished.

Your home can get repossessed even if it’s in joint names and whether the property is leasehold or freehold.

If you have dependants or family living in your home, you could get to delay your home from being sold for up to a year, giving you time to make new living arrangements.

Having a third party (e.g. partner, relative, or friend) agree to buy your share of your home could stop it from being sold, but they must pay the market value.

The money you’d get if you sold your share of the home, once secured debt, such as mortgages and loans gets taken off is your ‘beneficial interest‘. This isn’t the same as the legal title held by the person who owns it.

It’s usual for joint owners of the property, to share an equal beneficial interest.

If you’re the sole owner, the total value of the property minus the mortgage owed, and any debt secured on the property is your usual beneficial interest.

To sign over your share of the property or sell it for less than it’s worth, (hoping to prevent a sale) is a bankruptcy offence.

You could receive a Bankruptcy Restrictions Order, get fined, or imprisoned if the Official Receiver discovers this has occurred.

If your home’s in negative equity, you may get to keep it. If the value of your share (once sale costs get subtracted) is only £1000, you won’t need to sell. The official receiver will look at this again 27 months after the date your bankruptcy order and if your interest in the property is still less £1000, it’s unlikely you must sell your home, and the property will transfer back to you.

The Official Receiver or trustee has three years to take action on your home.

If they’ve done none of the following within three years from when your bankruptcy order began, your interest in the property will revert to you:

  • applied for a court order for you and anyone else in your home to leave.
  •  applied to the court for a Charging Order.
  • agreed that your share of beneficial interest will go to them.
  • sold your beneficial interest to a third party, such as a relative.

If you’re a renter, bankruptcy is unlikely to mean you must move out, unless:

  • your tenancy states that a bankrupt person can’t stay a tenant.
  • a postponed Possession Order was previously in place or other grounds for possession because you’re in rent arrears or you broke your tenancy agreement in another way.
  • you’ve received financial benefit from your tenancy agreement.

Going through a bankruptcy may make getting future tenancy agreements harder.

If bankruptcy puts you at risk of homelessness, contact your Local Authority to see if you’re eligible for rehousing.

British semi-terraced townhouse - Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy
Photo by Rich Tervet on Unsplash

Will I Have to Sell My Vehicle?

If your vehicle’s on a hire purchase or logbook loan agreement, the finance company often cancels this once you enter bankruptcy. You must return the vehicle. The outstanding debt gets included in your bankruptcy, so you won’t need to make payments. If you have permission to keep the vehicle, you’ll be liable to pay back the debt.

The above applies to other goods bought on hire purchase agreements.

Will Bankruptcy Affect my Job?

For most people, bankruptcy won’t affect their jobs and, unless your work contract states you must tell your employer you are bankrupt, you shouldn’t need to inform them.

Bankruptcy may affect specific regulated professions in which you must have a licence or be registered.

This may include roles within the following areas of industry:

  • accountancy
  • banking and financial services
  • estate agents
  • gambling
  • insolvency
  • law

Check with any professional body you may belong to, to find out how bankruptcy may affect your job.

Bankruptcy may mean you find it difficult to get a job in areas such as the civil service, the police force, and security firms.

For business owners, please look at this information by Citizens Advice.

Businessman using smartphone - Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy
Photo by Dane Deaner on Unsplash

Will Bankruptcy Affect My Pension?

Depending what type of pension you have and whether you’re at, or are near the age where you’re able to access any of your pension savings, your pension could get counted as an asset and get taken from you, but, you may have options protecting it.

If you receive money from a pension, your Insolvency Officer counts this as income. If this pension income provides you with more than you need to cover daily living expenses, you may get asked to contribute towards your debt.

See Income Payments Agreements and Income Payments Order.

If your only income is the State Pension and/or other benefits e.g. Pension Credits, you won’t get asked to pay towards your debts.

To stop them from being claimed by the Insolvency Officer, you might prefer not to receive payments from your pension pot.

Due to the complexities of pension regulations, you should get expert advice on this.

You may find this resource helpful.

Grey-haired woman looking at painting - Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy
Photo by Bianca Isofache on Unsplash

Other Considerations Before Applying for Bankruptcy

Until you’re discharged from bankruptcy, you must abide by restrictions. It’s a criminal offence not to follow them.

Things you won’t be able to do are:

  • be a director of a company.
  • borrow more than £500 without telling the lender you’re bankrupt.
  • buy a council house using the ‘right to buy’ scheme

If you had to go bankrupt due to negligent or dishonest behaviour, an official receiver can extend the restrictions with a Bankruptcy Restriction Undertaking (BRU) or Order (BRO), which can last up to 15 years.

Your bankruptcy will show on your credit file for six years after your bankruptcy starts. During this time, It’s likely to be harder to get credit.

Bankruptcy can affect your immigration status and mean it’s unlikely that any application for British citizenship (or to bring dependents to this country) will get approved.

To find out more surrounding bankruptcy check out this comprehensive guide from Citizens Advice.

Remember, the information on my blog isn’t financial advice.

You should consult a dedicated professional when making important financial decisions.

If you find yourself overwhelmed with money worries, please seek help from any of the following organisations:

Debt Advice Resources

The Money Charity
National Debtline
Citizens Advice
StepChange

My hope with this series is that it helps at least one person to better understand the options for dealing with overwhelming debt and gain hope for their future.

If you think this article (or any of the posts on the blog) could help anybody, please share. You can even pin to Pinterest! Just hover over the left-hand corner of the image below and click the red ‘P’ icon.

Image of businessman walking along pavement - Five Possible Solutions for Tackling Crippling Debt – Part Five: Bankruptcy

I love hearing from you and want to grow this community. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.

Lisa aka ‘Bunchy’

Five Possible Solutions for Tackling Crippling Debt – Part Four: Debt Relief Orders

Debt Relief Orders - A bump sign on a road

This series covers five possible solutions for tackling crippling debt.

Part one looked at Debt Management Plans, part two explored Administration Orders, and part three covered Individual Voluntary Arrangements.

In this post, I’ll explain Debt Relief Orders.

I’ll explain what they are and for whom they’re suitable. You’ll find

out what you’d need to do to apply for one, and what having one may mean for you.

For a brief explanation of Debt Relief Orders, watch this video from debt charity Stepchange.

Debt Relief Orders - Five Possible Solutions for Tackling Crippling Debt: Part Four - Bunchy the Budgeteer (Hand in the victory sign)

What Is a Debt Relief Order?

Debt Relief Orders (or DROs) may be suitable for people with total debts of under £20,000, with little chance of repaying them.

Although a Debt Relief Order is another form of insolvency and is legally binding, you won’t need to go to court.

Once granted, a Debt Relief Order freezes your debt for 12 months (known as the moratorium period). During that time, your creditors (people you owe money to) cannot take any further action against you. They can still add interest and charges. They shouldn’t contact you during those 12 months either.

Once the 12 months are over, if your finances aren’t improved, the debts included in the DRO get written off, cancelling them.

To be eligible for a Debt Relief Order, you must have little to no assets and little surplus income left over after covering your basic living costs.

There are other criteria to meet to apply for a Debt Relief Order.

Debt Relief Orders - Box files on shelves
Photo by Samuel Zeller on Unsplash

Full Criteria for Applying for a Debt Relief Order

To get considered for a Debt Relief Order, you must:

  • Not have debt above £20,000.
  • Be left with less than £50 a month left over after covering basic living costs.
  • Not own a property.
  • Have lived (or run a business) in England, Wales, or Northern Ireland in the last three years.

For people living in Scotland, look at the Minimal Asset Process (or MAP), which has different criteria and fees. You can read more on MAPs here.

  • Not have been involved in any other insolvency proceedings or applied for a DRO within the past six years.
    If any of your creditors have asked a court to make you bankrupt, you can ask the creditor if you could instead apply for a DRO.
  • Own less than £1000 worth of assets. Besides this £1000, you can also own one motor vehicle, as long as it’s not worth more than £1000. If the vehicle has been adapted for any disability of yours, then the cost of the vehicle doesn’t matter.

Assets that get counted towards the limit of £1000 include:

Jewellery (though not wedding rings).
Computers
Property/land.
Antiques
Savings and shares
Money owed to you (unless you’re unable to get it back from whoever owes you).

The worth of these assets is what you’d expect to get if you sold them, not the cost of what you paid for them.

Debt Relief Orders - Flat lay view of pink laptop computer
Photo by Majo Villalón on Unsplash

Assets that aren’t counted towards the limit of £1000 include:

Furniture
Bedding
Clothes
Items required for your job or business and essential household appliances you couldn’t manage without (e.g. a cooker).

A debt adviser will tell you which assets are or aren’t included.

Which Debts Can I Include in a Debt Relief Order?

Debts You Can Include in a Debt Relief Order:

  • Credit card debts
  • Store card debt
  • Catalogue debt
  • Loans
  • Overdrafts
  • Rent arrears
  • Buy now – pay later agreements
  • Business debt
  • Council tax arrears
  • Benefit overpayments (unless caused by dishonest behaviour)
  • Money owed to HM Revenue & Customs (e.g. National Insurance Contributions or Income Tax)
  • Utility bill arrears
  • Phone bill arrears
Debt Relief Orders - credit card
Photo courtesy of Dreamstime

Which Debts Can’t I Include in a Debt Relief Order?

Debts You Can’t Include In a Debt Relief Order:

  • Magistrate court costs
  • Student Loans
  • Child maintenance and child support payment arrears
  • Social fund loans
  • Confiscation orders
  • Compensation for injury or death
  • Television licence arrears

A debt adviser will tell you which debts are or aren’t included.

How Do I Get a Debt Relief Order?

Only an authorised debt-management adviser can organise a Debt Relief Order for you.

Only the Insolvency Service can grant Debt Relief Orders.

Debt Relief Orders - Silhouette of woman at window
Photo by Spencer Pugh on Unsplash

Does It Cost to Set up a Debt Relief Order?

To get a Debt Relief Order you must pay a fee of £90. You may be able to get help from a charity to cover the cost.

Are Joint Debts Included in a Debt Relief Order?

On your application, you must include the full amount of any debts you share with another person. This will count towards the limit. Once your Debt Relief Order ends, your responsibility for the debt gets cancelled. The other person will still be responsible for the debt.

Can My Debt Relief Order Get Cancelled?

Your Debt Relief Order could get cancelled if your finances improve and you have more than £50 a month after covering basic living costs. There are several other reasons for having your DRO revoked, which you can find here.

Debt Relief Orders - Cartoon figure stood behind a large red x

Other Considerations Before Applying for a Debt Relief Order

There are restrictions you must adhere to while under the Debt Relief Order.

These restrictions mean you can’t:

  • get credit for more than £500 without telling the lender you have a DRO
  • act as the director of a company

For a full explanation of restrictions, look at this page by Citizens Advice.

During your Debt Relief Order, you still must pay your rent, bills and any debts not included in the DRO.

Your Debt Relief Order gets added to the Individual Insolvency Register. It’s removed three months after the DRO ends.

Your Debt Relief Order will stay on your credit record for six years. You may find it difficult to get credit during this time.

Citizens Advice have more information on DROs.

I hope this post was helpful for you. Is a Debt Relief Order something you’d consider? Have you ever been under a Debt Relief Order? What’s been your experience?
 
In the final part of this series, I’ll be covering bankruptcy.
Debt Relief Orders - Road sign with the word bankruptcy on it

Remember, the information on my blog isn’t financial advice.

You should consult a dedicated professional when making important financial decisions.

If you find yourself overwhelmed with money worries, please seek help from any of the following organisations:

Debt Advice Resources:

The Money Charity
National Debtline
Citizens Advice
StepChange

I love hearing from you and want to grow this community. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.

Lisa aka ‘Bunchy’

Five Possible Solutions for Tackling Crippling Debt – Part Three – Individual Voluntary Agreements

Handshake. Five Possible Solutions for Tackling Crippling Debt - Part Three - IVAs

This series covers five possible solutions for tackling crippling debt. Part one looked at Debt Management Plans. while part two explored Administration OrdersIn this post, I’ll explain Individual Voluntary Agreements.

I’ll explain what they are and for whom they’re suitable. You’ll find out what you’d need to do to apply for one, and what having one may mean for you.

Handshake - Individual Voluntary Agreements

If you want a quick video explanation of Individual Voluntary Arrangements, watch this video by StepChange.

What Is an Individual Voluntary Arrangement?

An Individual Voluntary Arrangement (IVA) is a form of insolvency. Due to this, it’s essential to get advice from an impartial professional beforehand. You can find resources at the end of the article.

An IVA is a legally binding agreement between you and your creditors (those you owe money to). You agree to make a complete or partial repayment of your debts via regular, affordable payments to a qualified Insolvency Practitioner (IP).

You pay 60 or 72 payments over five or six years. The IP divides the money among your creditors.

During this time, your debts get frozen. As long as you stick to the agreement, your creditors can’t contact you or take further action against you.

At your final payment, any outstanding debt gets cancelled. You’ll receive a ‘certificate of completion’.

Individual Voluntary Arrangements are only available to residents of England, Wales or Northern Ireland.

IVAs aren’t available in Scotland, but Scottish residents can consider Protected Trust Deeds. Although a similar alternative to an Individual Voluntary Agreement,  a Protected Trust Deed has its own pros and cons; and different fees. You can read more about Protected Trust Deeds here.

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How Do I Get an Individual Voluntary Arrangement?

An IVA can only get set up by an Insolvency Practitioner. You must prove to them that you have a regular and ongoing income and give them financial details such as your debts, your creditors, and any assets you have.

Your Insolvency Practitioner sees what debt payments you can afford to make and will help you compile a proposal. They then give the proposal to your creditors.

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What Happens Next?

The Insolvency Practitioner will contact your creditors with your proposal.

Your creditors may ask you to alter the proposal before they’ll make an agreement with you. If this happens, the meeting adjourns for 14 days, giving you time to decide. If you agree to the changes, the IVA will start on the date of the next meeting of creditors.

You can’t force your creditors to agree to the IVA. However, if the creditors that hold 75% of your debt agree with the plan, the IVA will go ahead. The IVA will apply to each included creditor even if they didn’t agree to the proposal.

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Which Debts Can I Include in an IVA?

  • Catalogue debts
  • Council tax arrears
  • Credit card debts
  • Debts owed to family and friends
  • Gas and electricity arrears
  • Money owed to HM Revenue & Customs such as Income tax and National Insurance arrears
  • Overdrafts
  • Payday loans
  • Personal loans
  • Store card debts
  • Tax credit or benefit overpayments
  • Water bill arrears
  • Any other outstanding bill, such as legal bills and veterinary bills
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Which Debts Can’t I Include in an IVA?

  • Child maintenance or Child Support arrears
  • Court fines
  • Hire purchase agreements
  • Mortgages and secured loan arrears

Although you are allowed to include mortgage (and rent) arrears (and other secured loans against your property), your creditors must agree to it and they often won’t.

  • Rent arrears
  • Social fund loans
  • Some types of car finance
  • Student loans
  • TV Licence arrears
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Can I Set up a Joint IVA?

An IVA is an Individual Voluntary Arrangement, so can only be in one person’s name.

Things to Consider About Joint Debts:

  • Your individual IVA can include joint debts (debts that include both yours and another’s name).
  • Any joint debt included in your IVA will still need the other person to continue to make regular payments. If you have some of the debt written off, the other person must pay any outstanding debt.
  • Although a joint IVA isn’t possible, an Interlocking IVA might be suitable for you and any person you with whom you share debts.
  • An interlocking IVA involves you both having an IVA set up at the same time, with any joint debts listed in your individual proposals.
  • Between you, you make regular joint payments. When your IVAs have ended, any joint debts get cancelled.

To read more about interlocking Individual Voluntary Agreements, click here.

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Does It Cost to Set up an Individual Voluntary Arrangement?

No matter who you set up your IVA with, you will need to cover fees. How much these are and when they’re payable depends on who you use.

These Fees Are:

  • a nominee fee, for setting up the IVA.
  • a supervisor fee, to cover the on-going administration costs of the IVA.
  • disbursement fees, which cover expenses paid to third parties during your IVA. These cover such things as the cost of insurance to protect money paid to your IVA and for the registration of your IVA with the Insolvency Service.

Depending on who sets up your IVA, you may not have to pay any fees in advance, but instead, have them deducted from your monthly debt payments.

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Can I Cancel an Individual Voluntary Arrangement?

An Individual Voluntary Arrangement is legally binding. Once made, neither you nor your creditors can cancel the agreement. Get professional advice to check that an IVA is right for you.

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What Happens If I Don’t Keep up with My IVA Payments?

If you don’t keep to your repayment schedule:

  • your Insolvency Practitioner may cancel the IVA and make you bankrupt.
  • your creditors might backdate any frozen interest on your debts.

If you find yourself in altered circumstances that make it difficult to make your repayments, you can ask your creditors to review the terms you’d agreed to in the original proposal.

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What Are Lump Sum IVAs?

Lump sum Individual Voluntary Arrangements may be a choice for those who have a lump sum of money to pay towards their debt. This may be money from:

  • a friend
  • an employer
  • a relative
  • the sale of a property
  • an insurance claim
  • a redundancy settlement

An available lump sum of money might enable you to agree to a much shorter IVA. (A typical lump sum IVA lasts for six months, but this depends on individual situations).

You may either be able to pay one ‘full and final’ settlement amount or part lump sum with several payments thereafter.

The lump sum IVA carries the same risks and benefits as a regular payment IVA.

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Will I Have to Sell My Home?

As long as you keep up mortgage payments and any other loans secured on the property, you won’t be forced to sell your home. However, if there’s any equity in the property, you may be requested to re-mortgage six months before your IVA is due to finish. If re-mortgaging isn’t possible, you’ll get asked to make a further 12 payments.

Monies received from a third party may be used to make a lump sum payment equal to the value of any equity in the property.

Re-mortgaging may mean a higher interest rate.

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Will I Have to Sell My Vehicle?

As long as your vehicle make and model is a reasonable price, you should be able to keep any car or motorcycle, etc, when setting up an IVA.

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Will an IVA Affect my Job?

Although unlikely, it’s possible that having an IVA could affect your job. It’s more likely for those in senior roles, such as:

  • Company directors.
  • People in certain professions, such as accountants.

If this concerns you, it’s best to check with any professional membership body, HR department or union.

Other Considerations Before Applying for an Individual Voluntary Arrangement

  • Your IVA gets recorded on the public Individual Insolvency Register. It’s removed three months after the IVA ends.
  • Your IVA will show on your credit file for six years after the date the IVA begins.

While your IVA remains in either of these two places, getting credit may be difficult.

  • Throughout the duration of your IVA, you’ll undergo yearly reviews. If your finances improve, you may get asked to increase your monthly payment.
  • At your last payment, any remaining debt included in the IVA gets cancelled.
  • Only the debts included in your IVA will get written off at the end of the agreement. You must repay any other debts you have.

For more information on IVAs, check out this webpage by Citizens Advice and this handy PDF by StepChange.

 

Please remember that the information on my blog doesn’t constitute advice. Important financial decisions should follow a consultation with a dedicated professional.

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If you find yourself overwhelmed with money worries, please seek help from any of the following organisations:

Debt Advice Resources:

The Money Charity

National Debtline

The Money Advice Service

Citizens Advice

StepChange

I love hearing from you and want to grow this community. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.

Lisa aka ‘Bunchy’

Five Possible Solutions to Crippling Debt – Part Two: Administration Orders

Chain link fence

Last week I posted the first in a series of five possible solutions for tackling crippling debt. If you’re having debt problems, read that post too. In this post, I will show you another possible solution for getting debt under control; Administration Orders. I’ll explain what they are, what criteria you’d need to meet to get one; and what to expect if you’re granted one.

What Is an Administration Order?

An Administration Order is something the County Court grants, to give you a way of handling debts you’re having trouble repaying.

An Administration Order is legally binding. Once it’s set up, your creditors (people you owe money to) won’t be able:

– to contact you or take any further action against you (unless the court gives them permission).

– to add any more interest or charges to your debt.

The Order involves your debts being dealt with as one. Instead of you paying your creditors, you’ll pay the court a single monthly payment; which they’ll then split between your creditors.

How Do I Get an Administration Order?

For the court to consider you for an Administration Order you need to say yes to the following questions:

– Do you live in England, Wales, or Northern Ireland? Administration Orders aren’t available in Scotland.

– Do you hold debts with at least two creditors?

– Has at least one of your debts involved a County Court or High Court judgment being made against you?

– Is the total of your debts, including the interest and charges under £5,000?

– Can you show you’re able to make regular payments?

If you said ‘yes’ to the questions above, then you have to fill out an N92 form (which you can view and download from here) and send it to your local court. On the form, you must give details such as your income, your outgoings, a list of your creditors; and how much your debts are.

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What Happens Next?

Once the court receives your N92 form, they’ll review it and decide whether they’ll grant you an Administration Order. A court hearing might be necessary. They must look at things such as how much you can afford after paying for your basic living costs.

Depending on whether the court grants you an Administration Order, you’ll get told:

– if every one of your creditors is included in the Order (certain creditors might ask that they’re left out. If this happens, the judge might order a court hearing to decide. Sometimes council tax arrears and criminal fines get left off the Order too).

– whether you must pay all or only part of the debts listed in the Order.

-how much you must pay the court every month (it can sometimes be as little as £1 per debt).

– how long the Administration Order will last.

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Will It Cost Me to Set up an Administration Order?

It won’t cost you to set up an Administration Order, but for every payment, you make to the court, 10% gets deducted as a court fee. However, the total fee across the whole Administration Order isn’t allowed to be over 10% of your debt. So, for example, if you owe £4000, the court can’t take any more than £400 in court payment fees.

Can I Cancel an Administration Order?

You can ask to cancel your Administration Order or to change your monthly payments, by writing to the court. You might have to attend a court hearing.

Composition Orders

A Composition Order sets a date for when your Administration Order will end. This is usually after three years. When you get to this date, your creditors cancel any debt you still have with them.

The court might consider a Composition Order if:

– you can only afford to repay a small sum towards your debt each month.

– your payments won’t settle your debts within a reasonable time.

If a Composition Order isn’t granted by the court, then your Administration Order will run until you’ve repaid your debts.

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What Happens If I Don’t Keep up with My Administration Order Payments?

If you don’t make your regular payments, then the court could:

– cancel your Administration Order.

– order an ‘Attachment of Earnings Order’.

An Attachment of Earnings Order is a demand the court makes of your employer, to take money out of your wages to repay your debts. If this happens, your employer could take a £1 administration charge each time they do the pay deduction. The court sets a ‘protected earnings rate’ for you. This means you’re guaranteed a set amount of pay before any money’s taken out by your employer.

Attachment of Earnings Orders only apply to residents of England and Wales and don’t apply if your debt is under £50 or if you’re:

– unemployed,

– self-employed,

– in the Armed Forces,

– in the Merchant Navy

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Other Considerations Before Applying for an Administration Order

– when your Administration Order starts, it’s recorded on the Register of Judgments, Orders and Fines. It’s usually taken off after six years.

– your Administration Order will be on your credit file for six years too.

– during the time that a record of your Administration Order remains in these two places, you’ll find it harder to get more credit.

– if you pay your debts in full, your record gets marked as ‘satisfied’.

– if you want to, you can pay the court £15 to get a ‘certificate of satisfaction’.

While researching Administration Orders, I discovered that they’re not often used anymore. I found that Debt Relief Orders are often more suitable and affordable. I’ll explain Debt Relief Orders in part four. If you want to research them now, have a look at this.

I hope you’ve found this information helpful. Is an Administration Order something you would consider? Do you think they’re a good solution for tackling crippling debt? What do you think is the best way of dealing with debt? Or are you living a debt-free life? Was it always that way? If you know of anyone who could benefit from reading this post or any of the parts in this series, then please feel free to share the post with them.

Debt Advice Resources:

The Money Charity

The Money Advice Service

Citizens Advice

StepChange

I love hearing from you and want to grow this community. Don’t be shy! Comment, contribute to the Facebook page, send me a private message or all three! I will always try to help you.
 
Lisa aka ‘Bunchy’