All IPs on the forum seem to recommend closing an existing current account and opening one with a different bank.
The problem I have is that my account is with Lloyds who are also my main creditor so my loans and credit card are paid via direct debit from this account.Due to my financial state I have also now got an overdraft with them.
Given this situation I cannot see how they would allow me to close this account
I think that your IP didn't quite explain it properly - you are advised to open a new bank account with a bank who is not connected with any of your creditors, and ensure your wages and essential d/debits (not loans etc) are transferred. The new account nust not have an overdraft facility (as that would constitute credit, which is forbidden under an IVA).
Then you can tell Lloyds about the IVA process. You need to move banks as they will sieze any money in the account to offset your debts. The overdraft then becomes one of your creditors.
In terms of accounts, it depends on who your creditors are, and what your credit rating is like at the moment. You may be able to secure a current account with a high street bank, but you are probably safer to go for the 'basic' accounts. People on here speak highly of the Co-op Cashminder account. Personally, I have a Yorkshire Bank readycash account (for the Maestro card).
You will find that Lloyds won't let you close the account anyway. Until your IVA is approved, they will probably continue to take out money for loans, and overdraft charges, even though there is nothing there.
Nothing to worry about as this money will be captured by the IVA.
Once you are in an IVA, they will probably sell the debt on and then close the account.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Think of it as an opportunity to wipe the slate clean and start again, in control of your money, with an account that is in the black rather than the red.
It was quite surprising how little notice the bank took of my salary not going in. They were more concerned that I cancelled the direct debits.
Same here. I even tried to cancel the DD for the loan, but they just kept re-instating it!
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I think you can try for one with two creditors as long as you have three lines of credit between the two.
One of the professionals will be able to confirm that.
Last edited by kallis3 on Fri Feb 13, 2009 5:08 pm, edited 1 time in total.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Hi all - I too had a loan & overdraft with our main bank account for wages, direct debits etc.
I was advised to switch all our wages, direct debits for household bills & then do nothing as the overdraft would be included in the IVA.
The bank (Allaince & Leicester) never questioned anything that I did & I just left the account overdrawn into its overdraft.
Natwest do a great basic account with online banking & a solo card. You can apply on line easily too with no credit check.
Yorkshire bank have a great basic account with online banking & a maestro card & no credit check - but you have to apply in the bank/phone.
I have also heard Co-op have a good basic account too - but not personally looked at it.
Royal Bank of Scotland have a basic account too - but I think they are linked with Loylds TSB.
My advise is switch to a bank not linked with any of your credits - switch all your wages DD etc & just leave the old account alone till your IVA is sorted. It also give you the duration of your IVA to build up a good history with a new bank that you have no debts with.
Good luck with your IVA & keep posting
Final IVA payment made in April 2013, never ever thought we could do it or get through it but we did! X
An IVA.co.uk Mentor is someone sharing from their experiences of dealing with debt
Hi Gordon, before you close anything down, you really need to get some expert advice. The experts on this site come highly recommended and you can get their details on the left hand side of the page, most have a link under their posts as well.
You will be able to discuss it in more detail then and hopefully they will point you in a direction tailored to your individual needs.
I doubt he'll be able to close it down anyway - Lloyds probably won't let him.
HSBC wouldn't let us do that.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Yes you can do an IVA but it won't be a protocol compliant one as under three creditors - but you have sufficient debt. Visit www.iva.com for reviews on practitioners and speak to one or two their advice is free. Good luck
Last edited by David Mond on Fri Feb 13, 2009 5:17 pm, edited 1 time in total.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
