Brendan Burgess
Founder
- Messages
- 52,179
Example 5 – Conor – PIA
This example is designed to show how these guidelines are applied in the case of a debtor who is living beyond his or her means.
Conor is employed as an accountant and takes home €4,000 a month.
He is single and lives in an apartment which he bought in 2006 for €280,000 but which is now valued at about €160,000.
The outstanding mortgage balance is now €258,000 and the monthly payment is €1,200.
He also has a mortgage with an outstanding balance of €210,000 on a buy-to-let property which is unoccupied.
Conor has a personal loan from a bank with an outstanding balance of €39,000 and outstanding balances totalling €22,000 on three credit cards.
He owns outright a car worth €25,000.
His discretionary spending leaves him little money to pay his debts. He is hoping that a PIA or DSA can solve his financial problems.
Using Table 2 (One adult household, vehicle), the total set costs for the household are €1,029.83 a month.
To this is added the €1,200 which Conor pays in mortgage payments which the PIP has assessed as reasonable having regard to the criteria on pages 11-12.
Conor’s reasonable living expenses come to €2,229.83.
The PIP will make the following calculation:
Monthly income after income tax and social insurance contributions
||
€4,000.00
T
o
tal set costs
|
€1,029.83
Mortgage – reduced payment under the proposal
|
€1,200.00
C
h
ildcare
|
None
Special circumstances|
None
Reasonable living expenses
|
€2,229.83
|
€2,229.83
N
e
t disposable income
|
€1,770.17 For Conor’s application, this means income of €4,000.00 less reasonable living expenses of
€2,229.83, giving a net disposable income of €1,770.17 a month.
[FONT="]
[/FONT] Conor is living beyond his means. The PIP will likely advise Conor that he will need to consider reducing his spending so as to enable the PIP to put forward a proposal more likely to achieve creditor support while keeping Conor in his home. The PIP, in formulating a proposal to Conor’s creditors, will consider Conor’s need for a car and may suggest that he should sell his car and either not replace it at all or replace it with a less expensive model.
This example is designed to show how these guidelines are applied in the case of a debtor who is living beyond his or her means.
Conor is employed as an accountant and takes home €4,000 a month.
He is single and lives in an apartment which he bought in 2006 for €280,000 but which is now valued at about €160,000.
The outstanding mortgage balance is now €258,000 and the monthly payment is €1,200.
He also has a mortgage with an outstanding balance of €210,000 on a buy-to-let property which is unoccupied.
Conor has a personal loan from a bank with an outstanding balance of €39,000 and outstanding balances totalling €22,000 on three credit cards.
He owns outright a car worth €25,000.
His discretionary spending leaves him little money to pay his debts. He is hoping that a PIA or DSA can solve his financial problems.
Using Table 2 (One adult household, vehicle), the total set costs for the household are €1,029.83 a month.
To this is added the €1,200 which Conor pays in mortgage payments which the PIP has assessed as reasonable having regard to the criteria on pages 11-12.
Conor’s reasonable living expenses come to €2,229.83.
The PIP will make the following calculation:
€2,229.83, giving a net disposable income of €1,770.17 a month.
[FONT="]
[/FONT] Conor is living beyond his means. The PIP will likely advise Conor that he will need to consider reducing his spending so as to enable the PIP to put forward a proposal more likely to achieve creditor support while keeping Conor in his home. The PIP, in formulating a proposal to Conor’s creditors, will consider Conor’s need for a car and may suggest that he should sell his car and either not replace it at all or replace it with a less expensive model.