Make sure the MARP calculations are being done right:)

H

hastalavista

Registered User
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Want to share with you some experiences in the process that I came across with a client.

The first step in the MARP process is to fill out the SFS: Statement of Financial Situation for your lender. Client did this.

This is an industry standard 10-12 page document which at cell B11 shows total monthly income and at C38 total monthly expenses

In this case
B11 was 6000
C38 was 5980

The next step was to provide copies of any stuff the lender couldn't see on line, credit cards statements etc. Client did this. There is no CC debt, paid off every month.

In addition to the current account client has a budgeting type account which is in effect a small overdraft which is used to pay annual expenditure items such as house insurance etc.

This is funded from the current account on a monthly basis at 520 euro a month.

The lender then sent out the summarized Income and expense statement that showed an additional 620 as a monthly payment, made up as to 520 for the budgeting account and 100 being their estimate of the minimum CC payment due each month.

On this basis no restructuring was on offer and my client was really upset as he did not understand the numbers as no explanation was given: the 600 was billed as other monthly debt.

Scary stuff as the budget account and the CC are just timing

ps to clarify:

Instead of showing 5,980 as the out goings, they showed 6,600
 
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Perhaps the lender (incorrectly?) assumed that the borrower was living even further beyond their means than they actually were, expected them to just cut back and on that basis refused any restructuring? I guess the MARP appeals process may be relevant here if the lender cannot be convinced that their approach to the figures is not accurate?
 
Thanks for comments
There is an argument to be made, which has been discussed elsewhere here, that in the first year or longer, if the borrower has no savings, how does he pay the annual only expenses: eg UNIV fee of 2,000 which has to be paid in one go.
It has to be paid now at the start of the academic year and he will also need to put 156 odd a month a side from how till Sept 2012 to have next years ready.

The budget account figure could be used for it, so inclusion as secondary debt could have a case, however including only the min payment on the CC is baffling, given the interest rates applicable, and seemingly ignoring the repayment of the CC debt.

Update at 20:40 on 16/09.

Client has been told that if he wants the 620 dropped from their calculations he needs to shut down the budget account and close his cc accounts.
 
hastalavista said:
Client has been told that if he wants the 620 dropped from their calculations he needs to shut down the budget account and close his cc accounts.
Click to expand...


It's a surprise that the person in financial trouble has not already closed their credit card account?
 
Yes but by it's very nature, having a credit card account means the OP could go into more debt very easily with the credit card.
 
Marp

Ive submitted MARP forms in July to BOS - got word yesterday that I got accepted for further reduction payments - for 3 months!! - it took them 2 months to get back to me so in effect 1 month without stress. Rang BOS/Certus to complain and was advised to write in to their underwriters. I also rang ombudsman to start formal complaint - MARP is designed to help people in arrears. The forms are a nightmare, very complicated, and take ages to process. Ridiculous "solution" by central bank who are trying to shift the fact that they allowed so much personal debt to accumulate, and now have thousands of people in arrears. I've been to MABS, (wonderful people) tried to sort out personal debt, and I have to fight every step of the way. I do feel Im taking one step forward, 2 steps back but keep plough on. This has to even out somewhere along the way - too many people involved, too many people trying to cope.
 
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