Too soon to apply?

[facingittogether]

icebrick - melanie is our ip and we had some awkward creditors - but melanie and our tema got our ip approved.

i can honestly say i am so thankful to them as i feel like we have been given a second chance at living our life, without the stress of crediors chasing us - i am not saying that i think the next few years will be a breeze - but we at least have got a budget to stick to and alot of the stress has been lifted.

you would not go wrong taking advise from melanies team as they are so freindly, non judgemental and will explain your options to you honestly!

barb x

[facingittogether]

icebrick

last post should have read melanie and her team got our iva approved!

barb x

[icebrick]

Cheers Barb. Your posts always give me a boost and that extra bit of encouragement. I think I will get in touch with Melenie's team. But I do want to stop paying what I am normally paying every month as soon as I can. Do you think that will happen as soon I talk to Melenie's team and the IVA process is initiated? Or will I have to continue making these payments until the IVA is approved? I know that Melenie already answered this question but how does it work really?
Cheers.

[Viki.W]

Hey Ross, I think you should make that call to Melanie as soon as possible, it will make you feel a hell of a lot better. If you are using credit to pay for credit then you should stop doing that now. You probably can't afford the payments every month without using credit anyway. I'm sure your IP will tell you to stop paying unsecured creditors in the run up to your creditors meeting. This won't stop them trying to get payments from you, some people choose to not pay until IVA approved, some choose to make token payments to try to ease the phone calls. My IP has advised that I don't pay and as I cannot afford any payments, I have stopped paying any of the creditors. It will make no difference to the outcome of the creditors meeting whether you make token payments or not. I'm not an expert so maybe an expert can clarify this for you. Call Melanie today and let us know how you get on. Viki X

[ianmillington]

Having read the last few posts on this thread there is one point that I'm not sure you are clear on: the bank.

If you attempt an IVA and have a bank overdraft you must open an account with a bank to whom you owe no money and use that account thereafter. The bank with whom you have the credit facility will undoubtedly need to go into the IVA and will freeze it when they find out you are entering into the IVA. There is no viable alternative solution as the bank will be bound and the continuation of a credit facility in an IVA will be inappropriate.

Whether or not you cease paying the creditors will be a matter of personal choice. I would be in favour of token payments unless and until you are advised that an IVA is right for you but be advised by your IP as to when this should stop. Having said that if you can only make token payments to creditor A by increasing your debt to creditor B (not recommended!)then the sooner you make the call the better.

Ian

[icebrick]

How will "not paying my creditors" affect me? As Melanie advised on the forum, I have asked my employee to change my bank account details. The payroll department told me that it will be passed on to head office but they cannot tell how long it will take for the request to be processed. They couldn't even give me an estimate. My next wage is due on the 30th. I don't want my bank freezing my funds and especially my wages when I initiate the IVA process.
Cheers.

[MelanieGiles]

The bank will only excercise the freeze when they are notified of your intentions, so you need to advise your IP of when you have the new account set up and your payroll department have amended their records, and then the old bank can be informed. In the meantime, clearly you should not use the overdraft facility or worsent the bank's position.

[icebrick]

I have really worsened the bank's position to the greatest extreme I think. When my monthly repayments go out this month, I think it will cut deeply into my overdraft as well. My credit cards have near enough maxed out. They have less than 100 remaining. The only good thing is that I have made my repayments on time to date. Do you think I should cancel any direct debits I have in place at present?
And how will using the overdraft facilities affect me? I have also taken a few overdrafts on other bank accounts but this is less than a thousand pounds in total so I don't wish to include these in my IVA. I know I need help and quick but I can't risk having my wages frozen either.
Cheers.

[Viki.W]

Hey Ross, as far as I am aware, all of your unsecured debt has to be included in an IVA. I would open another bank account for your wages and only spend what you have. Have you contacted an IP to act for you yet? Viki X

[MelanieGiles]

If you have decided that you are going to proceed down the IVA route, then you should cancel all non-essential direct debits so that the bank's exposure is minimised.

[icebrick]

No I haven't got an IP to act for me yet Viki.
What exactly are non-essential direct debits? Reason why I kept my Direct Debits in place is because I wanted to keep my credit rating. Cheers.

[MelanieGiles]

Payments to creditors - but only if you feel that you are going to enter into some form of insolvency proceeding. And you will only be able to hold onto your credit rating if you can afford to continue to service your debts within contractual terms without reverting to additional borrowings to do so.

[icebrick]

Just canceled most of my Direct Debits to my creditors. I didn't amend the smaller credit card repayments though.
I have 2 weeks to find out if my salary is going to be directed to my alternative bank account. In the meantime I have a number of repayments coming up before I enter an IVA arrangement. A bank loan repayment contribution is due by the 28th. So I am a bit lost as to what I should about that. If I tell my bank that I can't afford to pay or that I am in the process of entering an IVA, will they still freeze the salary should it go into the older bank account?
Cheers.

[Viki.W]

Hey Ross, please wait for some expert advice. I was in the same situation but I wasn't waiting for a wage to be paid in. I cancelled all direct debits, opened a new account and tsb made the loan payment from the old account, but because there wasn't any money in the account it took it overdrawn and now my IP will include this in the IVA. I think I am at a later stage than you but the important thing is to have a new bank account. I actually did tell tsb that I was insolvent, not everyone does this, they sometimes leave it to their IP. How far along are you with regards to an IP, have you made that call yet?! Viki X

[size5]

If your salary goes into the new account then all well and good. If your old bank takes the loan repayment on the 28th, as it probably will, then you are left with a larger overdraft and a smaller loan, broadly the same amount in total, give or take the odd charge. The main point is that it is not your money that has paid the loan as your money is elsewhere.

Leave the telling of the new arrangements to your old bank, to your IP, but if you cannot stop your wages going into the old account, then you need to take all the money out, in cash if necessary, and deposit it into the new account to create the same effect as if your money had been paid into the new account. You can the reinstate your normal bills through the new account so that they do not get behind.

Hope this helps.