has applying for IVA ever resulted in bankruptcy

[a_c]

How long on average does it normally take to get an IVA approved?

What percentage of IVAs are rejected?

Has anyone ever lost their house as a result of applying for an IVA? e.g. has applying for an IVA ever resulted in bankruptcy?

What happens with my existing current account? Will I be able to keep it and my Switch card?

Many Thanks,

[ivoriva]

1)Normally between 6-12 weeks, depending on how quickly you can provide supporting documents and the complexities of your case, along with how busy the firm/IP you use are.
2)Probably about 20-25% are rejected, but I dont know any exact figure. Rejection is relatively low as most reputable firms/IP's will only present a proposal they think will have a good chance of being accepted.
3)If you defaulted (ie failed) your IVA, it is possible creditors or your IP will file for your BR, though it isnt very common. It is worth bearing in mind, if you own a house with equity creditors will expect you to release some of this to them at some point during the IVA - normally through a remortgage or additional monthly payments to cover the equity.

[ivoriva]

If you have debts with your bank (ie overdraft, loan, or CC) that are to be included in the IVA, then you will not normally be able to keep the current account open. If you dont have debts with your bank, then you could keep your current account open as long as you remove any overdraft facility. Although HSBC seem to actively close current accounts for customers with an IVA.

In most cases, people do have other debts with the provider of their current account, so it is normal to have to open an alternative 'basic' account - ie no debit card, overdraft, cheque book etc - with another bank that you have no current links with.

If your credit rating is currently good there is nothing to stop you applying for another current account now, as long as you request not to have an overdraft and the bank isnt one of your current creditors that is going to be included in the IVA.

[a_c]

Thanks for the advise.

Unfortunately I am with HSBC, but I do not have any debts with them. Some time ago I ran into difficulties and all the bank did was replace my cheque guarantee card with a Switch card so I couldn't write guaranteed cheques. Do you think they may be willing to do the same? I've been with them for over 20 years.

[Skippy]

I think you would be better changing bank accounts as HSBC are being very harsh on people in IVA's. Personally I think everyone should close their account with them - I'm stil fuming about the fact that one of their branches no longer deals with people who earn under a certain amount!

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[ivoriva]

I would absolutely agree with Skippy there. Sadly with HSBC being one of the least 'ethical' banks, I fear they will close your account if you enter into a IVA. So do make provisions with another bank that have no links to your creditors or HSBC, if you are going to enter into a IVA.

[a_c]

Thanks for the invaluable advise.

Is there anyone you would recommend? Barclays is out because I owe them over £25K. I have no debts with Lloyds TSB or Nat West, is either of those worth considering?

I would need an account that my salary could be paid into and which would accept direct debits. Would that be a problem? I can live without a cheque book, but the prosect of not having a debit card doesn't appeal to me. Is a debit card a problem? I don't see why it should be because it's not possible to go overdrawn with one is it?

Thanks again,

Andy

[susanc22]

Hiya Andy,

We have just switched accounts to The Co Oporative Bank Cashminder Account. You can have your salary paid into it, set up direct debits and standing orders, and they give you a Visa Electron card, which can be used in most outlets but not over the Internet.

If you are an internet junkie like me, i would recommend getting yourself a Cash Plus Mastercard.
It is kinda like a Pay-as-you-go-credit-card but without the credit, and no one will know you have adverse credit as it looks like a gold card! Just be careful of the monthly fees

[Rainbow]

Hi Andy
We switched to Natwest Step Account and have a solo/maestro card which can be used pretty much everywhere - we have salary paid into it and direct debits set up and you can make one off payments which is the way we have got round not having a cheque book!
Hope this helps
Rainbow

[mick.i]

Spot on Rainbow, i too changed to Natwest and the on-line banking service as well as the maestro card is perfect for being in an IVA.

[Rainbow]

Oh yes and you can use it for the internet too... and if you take advantage blue you can extra savings and car breakdown cover for £6 per month!

[a_c]

Excellent advice, thanks very much.