PLEASE HELP what should I do?

[maria.od]

PLEASE HELP what should I do? Letter form MBNA offering me the option of Partial settlement-I am 80k in debt and currently gathering info together to send of for IVA. I been advised to stop all payments to my creditors by my debt advisor as I was making token payments.So I sent letters to all my creditors advising them of this.Yesterday I received a letter from MBNA quote'There is the option of a PARTIAL SETTLEMENT', settling your account once & for all at a substantial reduction to your current outstanding balance (I owe the 11k), Upon Acceptance & clearance of your payment MBNA would register the account as a partial settlement WITH THE CREDIT REFENCE AGENCIES & we would not pursue you for the remaining balance.Should I make contact with them a7 negotiate....& if so I can do this with the remainder creditors?

[Michael Peoples]

You should continue on with your proposal as even if you do settle the MBNA debt there still is nearly £70k left. If you have enough to settle with all creditors at the same rate you could attempt this but it would be difficult and time consuming. It would be better to offer the money as a lump sum IVA which would be agreed at a meeting of creditors. Speak to your IP if confused.

[Declan at DebtFreeDirect]

Hi Maria
Michael is correct, offering a partial settlement with MBNA still means you are left with your remaining creditors who may not offer any reduction. I agree that you should continue with your proposal.

Thanks

[size5]

These letters are par for the course, and over the course of time it is likely that you would have received them, as a sweetener, from most if not all of your creditors, MBNA are obviously just a little quicker than all the others. As much as anything else, they are a useful tool for creditors/debt collectors in re-establishing lines of communication and therefore payment with debts that may have otherwise proved difficult to collect, they understand that over indebted individuals rarely have the money to settle, but if they can get you on the phone then for them that is a good thing.

Regards.

[MRBLUESKY]

hi maria if accepted by your creditors,your iva payments will be based on your disposable income so it wont make any difference to your future finances if you settle one debt pre iva.all you would be doing is using up any money you have managed to save,that would come in handy for any future contingencies.eg your washer or car unexpectdingly breaking down.and xmas is just round the corner.

[Skippy]

But surely if you settle one debt outside of the IVA this would be preferring one creditor over another?

[MRBLUESKY]

as any token payments made prior to iva are supposed to be pro rata then other creditors could take a dim view i agree skippy.

[stirling]

Just to give you a heads up Maria, I received a couple of those letters from MBNA and about 5 phone calls offering me different options if I went through them. I was advised to ignore them, but admit they were a pain at the time.

[becca21]

regarding letters and fone calls, i haven't had any yet i am waiting for my draft to come through to be signed! do they get quite nasty is it best to just ignore them? i haven't made any token payments to creditors either since the process started, should i? sorry to but in just thought this was an appropiate link! sorry

[Cath]

Hi becca....did you get your phonecall yesterday?

My personal experience is that some of the callers are quite nice and understanding and others will try all manner of psychological games to get you to pay, even token payments.

I started off answering the calls but now I ignore them as even when they say they will put a hold on the account, they don't and continue to phone you anyway.

To be honest the only creditors who are phoning me many times a day are Barclaycard and Nationwide Credit Card. The rest are seemingly leaving me alone for now. I have sent letters to all of them advising of my impending IVA. Northern Rock even sent me a very nice letter.

I haven't made any token payments but I know others have. Pennyless made token payments before his IVA was accepted last week, although it seems to be the general rule of thumb that token payments or not will not affect the acceptance of an IVA.

[becca21]

yeh i did thankyou very much! i spoke to a really helpful bloke from debt free direct honestly he made me feel so comfortable!
put my mind at rest for now he said i had a good case but i know that doesn't mean it will be accepted! I haven't made any token payments as yet but my debts are only just due, i think i might wait for the letters to come through and then maybe pay something what you think? mind you i have had mixed reviews on doing that because of favouring creditors! oh i don't know!
how are you getting on cath?

[Cath]

Not too bad thanks. Try and take each day as it comes but each day seems to throw something else my way. Nontheless at least I know we're getting there!

Good luck and keep us up to date on how you're getting on too.

[becca21]

thanks cath you to!

[Shining]

I didn't make any token payments whatsover, didn't pay anyone up during my IVA process, I think professionals have said it has no bearing on the outcome of the day, however, some people feel happier paying a token payment and that is their choice.

All the best to all of you.

[Pennyless]

Hi Maria.....as Cath said, I made token payments to each of my creditors whilst ny IVA was going through, in any event as they were paid up to-date on starting the IVA, I only made 1 token payment to each before my IVA was approved. I am not sure if it does help in anyway making the token payments.

I have not received any nasty calls from my creditors and hope that my token payments went someway towards this, but truth be told I suppose we never know if the token payments do any real good.

I dont think theres a "one size fits all" in regards to "token payments" but I certainly would not of been concerned had I been unable to make them....its just that I had spare money and felt my creditors could get some benefit.

Good luck.