Q How debt guide will operate
THE guidelines to be issued by the State's new insolvency service will seek to allow people to have a reasonable standard of living where a debt deal is being offered. It will focus on needs, and not wants.
Using new guidelines, the assessors will look at household composition – number of adults, children, etc – and then go from there.
There are a range of categories under which reasonable needs will be established. A sample of these categories includes: food, clothing, health, household goods, education, transport, household energy, rent or mortgage costs and childcare.
So, for example, people should have enough food for a balanced, nutritious diet; clothing for all types of weather; and money for visits to the doctor.
The guidelines will also allow money for school books and uniforms, a car if public transport is inadequate and car insurance where a car is necessary.
Allowances will be made for special health needs. This means that, for example, a family with a child with diabetes or asthma will be given an extra living allowance. But private medical insurance will be excluded, as will having more than one car and holiday costs.
Even a family with one car seeking a debt deal could find that under threat. The thrust of the guidelines is that a family will typically not need a car if they live in a city with good public transport.
Childcare will also be factored in if required.