If you are working out your Individual Voluntary Arrangement (IVA) living expenditure budget we consider what budget you will be allowed to include for your pets.

This type of debt solution can be an extremely good way of solving a serious personal debt problem. However to implement it successfully one of the most important things you will have to do is to make sure that your living expenses budget is sufficient for your needs.

As part of this if you have pets you must ensure that you include an expenditure allowance to cover their upkeep and insurance costs.

What are the allowable expenses for pets in an IVA?

You are normally allowed to include up to £30 per month to cover the cost of your pets. This figure may not seem much. However it is based on an amount which creditors are known to accept for pet expenditure.

This sum will be sufficient to cover the reasonable cost of keeping many pets. However if the amount you need to spend exceeds this it may well be that your creditors will allow you to include a higher amount in your expenses budget as long as there is a reasonable justification for this.

An example of where this might be the case is perhaps if you have 3 large dogs or a pet with specific medical needs.

What if your pets cost more?

There is a point where creditors will draw the line and will not allow certain levels of expenditure on pets. One example of this is keeping horses. Horses are relatively expensive animals to keep. Generally speaking the cost of keeping a horse including stabling, food, grooming etc can be £200 a month or more.

It is likely that your creditors would reject a proposal suggesting that you need to spend £200 a month or more on your pets. The reason for this is that the essence of an IVA is compromise. You are asking your creditors to accept a settlement which means that they are likely to have to write off money that you owe them.

In return for agreeing to write off debt for you, your creditors need to feel that you are making the best effort to repay as much as you can. They are likely to conclude that you are not doing this if you want to keep pets that you simply cannot afford.

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What are my options if I have an expensive pet?

If you have pets which cost a significant amount of money each month to maintain but you want your creditors to accept your IVA proposal the options open to you are relatively limited.

The best scenario is that a third party will be prepared to pay for the upkeep of these pets. However if this is not an option then the possibility of finding a new home for the animals must be considered. Of course it is extremely difficult to give up pets which you may have been looking after for a considerable time.

If you feel that that giving up your pets is simply not an option you may find an insolvency practitioner who is prepared to put forward your proposal which includes these expenses. However you must be prepared for the possibility that this will be rejected and you will not be able to proceed with the Arrangement.

The alternative may then to consider a Debt Management Plan (DMP). If you this type of debt solution you are still committing to repay all of your debt (albeit at a reduced rate). As such creditors are often prepared to take a more relaxed view when it comes to living expenses.

It is important to get your IVA living expenses budget right

Before you sign off your IVA proposal it is vital that you get your living expenditure budget right. If you agree to a budget which is too tight you are unlikely to be able to live within it and you will risk not being able to maintain your payments and for the Arrangement to fail.

However when setting your budget you must remember that you are asking your creditors to write off money that you owe them. For them to agree to this, they have to feel that you are meeting them half way and making your best effort to repay them. Trying to keep unreasonably expensive pets will not help this cause.