Stressed

[baz36]

Hi, justin processof applying for IVA,got a consultant visiting me and my fiancee tomorrow. Finally added everything up after trying to get loans etc to pay bills, realising we both couldnt. We have been paying our bills BUT, not on time, having to cancel direct debits in bank,and then when we have paid bills we have had nothing left to live, which is why i debt is so high. We have debts of £55,000. We both have recently gone through divorce and have had to start over and have basically been using credit cards and loans to get us by.

We finally realised last week that we were in a hole too deep. We addded up what we owed for the 1st time, scared the hell out of us. Then rang a debt company who said we could qualify for an IVA.

Iam now so stressed out, we have a consultant coming tomorrow tostart off the application. I cant sleep its awful. Anyway just wanted to know if you know any answers to these questions:-

What happend about your overdraft in your banks, how is that dealt with?

What do we do about payments for credit cards that are due now when we cant afford the minimum payments anymore?

And the same with personal loan payments that are due now?

I know we will probably get some answers tomorrow, but could just do with a good nights sleep?

I suppose at least weve realised the extent of the problem and now realise that more credit is not the answer(we cant get it anyway)
Im just so angry at myself when I think back over the years and think of the money I could have possibly saved!

Thanks for letting me moan anyway.

[:-(]

[freelili]

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Hi and welcome

Normally you are advised to open a new basic bank account without any credit/overdraft facilities attached. Sooner rather than later, make sure the new bank is not related to the old in any way.

Your IP will advise you to either stop paying creditors or make token payments only, without favouring any creditor. Be sure to check out IVA companies, dont just go with the first 'sympathetic ear' some people have had bad experiences. (its easy to jump in with both feet as it offers a way out, many people feel ashamed, DONT, your IP will earn well out of it and is working for YOU).

Make sure that you include everything in your outgoings ie Dental/prescriptions, five years is a long time on a budget, just be realistic in your expenses as an unrealistic IVA will lead to failure.

Your overdrafts will become part of your IVA, be aware of the right of offset with your current bank. Be prepared for creditor onslaught when you begin to miss payments, they phone, write and threaten, but have no other power in the begining, they are paid to try to stress a payment out of you.

Its a stressful time but talking to others in the same situation will help you and their experiences will help you to make the right decisions. By reading other posts you will learn a lot. There are also some fantastic experts here, who will help you.

I am not an expert, just another person trying to face my debts. I agree that it hits hard, when you realise the extent of it all. You are already on the road to a brighter future.

Good luck in advance

LILY

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Edited by - freelili on 21 January 2007 14:07:53


LILY

[Skippy]

Hi Baz36 and welcome to the forum.

Firstly, can I say you have taken the hardest step - facing up to your debts. I had debts of around £65k and I buried my head in the sand for far too long.

I'm not an expert, I'm only speaking from experience, but I will try to answer your questions from my own experience. Your overdraft will form part of your IVA, therefore you will need to open a basic bank account with a bank who are not one of your creditors. I didn't have an overdraft (I had everything else though!) so I didn't have to open another account, so I don't have any experience on basic bank accounts. However I gather from other posts on the forum that Abbey do a basic bank account and I think you only need a driving licence and utility bill to open one. I think Dominic has one, so I'm sure he will correct me if I'm wrong! Other banks with a basic account are Natwest, Lloyds and Nationwide. Just make sure that the new bank is not one of your creditors, or linked to one of your creditors, eg Lloyds is linked to Black Horse.

Regarding payments due on credit cards, I was advised to stop making payments as soon as the IVA process was started. I understand some IPs might say to make token payments though, so you will need to confirm that. Once you stop making payments, you will get letters and phone calls from your creditors. Forward the letters to your IP, and when you receive phone calls inform them politely but firmly that you are proposing an IVA, and these are your IP's details. Some will be persistant, others will make a note of this and may not contact you again. I didn't hear from Barclays and Egg again once I gave them this information.

The above information also applies to personal loans. I was told to cancel all direct debits for loans and credit cards. DO NOT CANCEL DD'S FOR ESSENTIAL BILLS, EG MORTGAGE, COUNCIL TAX, ELECTRICITY, GAS ETC.

I'm sure once you have spoken to the consultant you will feel a lot better, but I hope the above information helps. The main thing to remember is you are doing the right thing.

Don't worry about moaning - that's what the forum is for! If you have any questions post here, and I'm sure that someone will be able to help you. Also, don't worry about asking your consultant or IP questions - that is what they are making a lot of money for, so make them work for it!!!

Good luck, and keep posting to let us know how you get on.

Three down, fifty seven to go until freedom!

[Dominic]

First stop paying your credit cards.

second: setup a basic bank account with a bank that is not one of your creditors. Use this to get your salary/income paid into and to pay bills/living costs. You cannot have an overdraft while in an iva.

Third: The bank will more than likely freeze your account as soon as an IVA is in place

Fourth: Stay calm, do not be ashamed your are doing the right thing.

[baz36]

thank you all so much for your advice and support. Got consultant coming at 10.30am tomorrow, will post on the other forum and let you know how it went.

Thank you so much again, still totally stressed, but there is light at the end of the tunnel (hopefully) just now thinking what if our creditors refuse.

We will see

[Dominic]

Chances are they won't reject ,the iP stands to make money out of the IVA and will not put it forward if there is no chance of it being accepted.

When you are interviewed by the agent tomorrow tel them everything all debts you have, and be completely realistic about incomings and outgoings.

[illihor]

As has already been said, you have already taken the most difficult step in admitting you have money problems and seeking professional help. Once you have had your consultant meeting I'm sure you will feel more at ease with the circumstances.

The overdraft will form part of the IVA. My overdraft was included and I was accepted on the 21st Dec.

In most cases you will be advised to cancel payments to your loans/credit cards. In some cases you may be told you can make a taoken payment to them all, even if this is £1, but everyone gets the same or it can be looked at as prefferential treatment.

There are debt professionals and forum members with a lot of experience here who will always be able to offer support and advice should you need it.

Kind Regards.

Lee