Too soon to apply?

[MelanieGiles]

Hi there.
If IPs are asking for fees up front, that ought to be warning enought that they are probably not right for you.

When you begin the process for an IVA it is usual to stop making payments to your creditors, or at least just make token payments based upon affordability. And in my opinion you are able to present a bankrtupcy petition now if that is the way you decide is best to go.

[icebrick]

Hi Melanie
I was referring to the Bankruptcy petition eligibility as I was previously told that this is the basis for an IVA eligibility. An IVA is what I am really after. So if I apply for an IVA on the 8th of May, then maybe can you from your experience give me a rough idea as to when my current monthly payments will stop or temporarily stop?
I understand that the aim is to reduce the monthly payments and pay back only what I can afford, but I do have a concern about how long I can afford to keep up with my current monthly Credit Card repayments.
Oh, and I just remembered. The bank once wrote to me and asked me that I should inform them if I am having difficulties with my current monthly repayments.
But this was regarding my bank loan. I didn't know if it was a good idea to respond to that as I didn't know what the consequences would be especially regarding my potential IVA.
Cheers.

[MelanieGiles]

You are in control of the stopping of your payments to creditors and not the legal process of applying for the IVA. In reality, you ought not to be able to carry on making your payments to creditors, as if you can you don't really need an IVA in the first place.

There is no harm in discussing your financial difficulties with your creditors directly, as they may be able to offer your some assistance or an alternative option.

[icebrick]

I have a negative balance at the end of each month which I withdraw from the credit cards to keep afloat. Can I call you directly? I think I'll phone up my bank in a couple of days time. cheers.

[icebrick]

The concern that I have about getting in touch with the bank directly is the affect it may have on the authorised overdraft facility that I have with them. Could the bank see me as a "financial risk" and withdraw that facility on the information that I give them or perhaps cut the credit limit on my credit cards perhaps?
Cheers.

[MelanieGiles]

That is always a possibility, but how long do you think that you can keep your financial difficulties from the bank?

[facingittogether]

hi icebrick

we were the same as you as that we too had negative at the end of the month, so borrowing off one card to pay another - but that can only go on for so long.

if i had not have faced up to our problems when i did and asked for help i know that by now i would have been really ill with worry!

you really have to face up to the fact that you cannot carry on the way you are! and once you ask for help you will feel like a weight has been lifted!

barb x

[icebrick]

So if the bank takes away my overdraft facility etc, would they not also provide a financial solution to go with it? Or can they just take away those extra credit facilities and not do anything in conjunction to eradicate my present circumstances?
If I take out an IVA I know that assurance is somewhat there.
Cheers.

[icebrick]

thanks Barb. It's relieving to know that I am not alone on this one.

[icebrick]

OK. But if the Bank is to limit my credit facilities, then are they likely to propose a viable solution to go with it?
I heard that if I apply for an IVA my usual monthly payments will stop immediately (straight after the telephone interview with the IP). Is it true that I really don't have to wait for 4-8 weeks to have gotten IVA approval from my creditors for this to happen?
So if I went through yourself what fees must I pay during the process?
Cheers.

[MelanieGiles]

It is usual for IPs to advise clients to stop paying creditors, or make token payments based upon affordability during the weeks leading up to the presentation of an IVA proposal. As you need ongoing banking facilities into the future, you also ought to look at opening a new account with a bank to whom you owe no money.

IP fees are paid out of the monies paid into an IVA post-approval and are at rates agreed with yourself and the creditors based upon the individual circumstances of your case.

[icebrick]

I was actually referring to the fee you would charge to offer your representation. Cheers.

[Viki.W]

I think Melanie's second paragraph states that the fee would be based upon your individual circumstances, I think if you actually chose Melanie to be your IP then when she has all your information she would discuss this with you. I think that's right, I'm sure Melanie will clarify. Viki

[Adam Davies]

Hi
In an IVA you pay no fees,unless you are returning close to a 100p dividend.It is actually your creditors that pay the IP by accepting a proportion of all the contributions that you make over the term of your IVA.A fair figure would be around 20%-25% of your total contribution
Regards

[MelanieGiles]

There are no fees to pay until the IVA is in place, and then these are deducted from your contributions at the agreement of your creditors.