Hi,
I am in the process of gathering information from my creditors to formally apply for an IVA.
I have an overdraft and credit card with my current bank and have just opened a new bank account with a bank that I do not owe any money to.
Can somebody explain the best way forward for me please? I have mounting credit card debts and two personal loans, along with the overdraft I have mentioned.
I almost have all of the information regarding latest statements etc and will formally send them off to start the drafting process. How long does this take and how long will it take before the IVA goes through? I have 4 children and am struggling and cannot see how we can celebrate christmas this year
What happens if my IVA application fails? What am I able to do after this?
I take it you have already approached a company? If so, once you send off your documents they will draft the proposal and send it to you to sign. When they receive that back a creditor meeting will be set up. It will normally take 6-8 weeks.
If your application is rejected, you can do a debt management plan, or the other option is bankruptcy.
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
You are doing the right thing in obtaining new bank account. I am a few weeks ahead of you and went applied for an IVA after mounting credit card and overdraft. The interest alone being paid to my credit cards was getting me down. I have 3 children who live with their Mum but it's not easy but stay positive - things will get easier if you do get IVA accepted . I have over £31 K in debt and have returned my IVA proposal today. It should only be 3-4 weeks until it goes to a meeting with all the creditors.
The whole process from start to finish can be completed in a couple of months. I have stopped paying my credit cards from last month and have received calls and letters. Up until last month I had perfect credit file.
I'm no expert but learnt so much from this excellent forum. My advice is speak to at least 2 IVA/Debt management companies. Don't rush into anything. Maintain priority payments - i.e council tax, mortgage/rent, utility bills.
If IVA fails you just revert back to where you are but if you have received the correct advice and are able to commit to IVA then there is no reason why creditors should not agree your proposal. The alternative is less for them in the long run. The beauty of the IVA is it gets you on a firm path to repay a proportion of your debt and gets the creditors off your back.
I have confronted all my creditors - Llloyds, Coop, Halifax, Barclaycard and been truthful with them about my situation and informed them of my IVA proposal. They have all been great. It's been easier than I thought it might be. Given the state of the economy and the mess the banks got themselves in - I don't think they can shout back too much?.
I do hope you get something sorted soon. The members on here are great and will help you. Good luck!.
Hi Diesel and welcome to the Forum.
You are doing the correct thing by trying to protect your income and paying only those expenses which are essential. Your IP should have already given you a list of requirements and on receipt the IVA can be drafted. It should not take long but in the meantime try and build up a small contingency fund which would help after the IVA has been approved.
Thanks for the messages. It's realy good to know that advice is out there.
Winter-Blues, how did the creditors react when you mentioned the IVA to them? I am in a predicament whereby I am now really struggling to pay off my credit cards bills and would like to let the creditors know that I am unable to make full monthly payments, should I mention the IVA to them?
Yes, I took advice on whether to inform creditors of IVA. Depends what stage you are at. Have you applied for IVA - filled out I & E etc?. I waited until I was committing to one IVA company and they advised me I was suitable for IVA. I initially told creditors I was going through financial problems but then recently told them full story. Alot of call centre, especially the foreign ones don't understand what IVA is!. But it keeps the process going and they hold your account for 10 days . My IVA company has sent letters to all creditors advising them of IVA proposal anyway. I haven't made any token payments and made sure I had the important things paid and car serviced etc. You should also look at building up small fund to see you through. I went to bank today to withdraw £10 as this has got to see me till Thursday when I get paid!!. I messed up some direct debits when I transferred bank account so beware of this. Some take a double payment or 6 weeks which has caught me out. Insurances and utility.
When you say build up a small fund, what is this for?
I have just opened up a new bank account with Co-op and I am going to start looking to transfer my Direct Debits into this new account and get my monthly salary paid in there too.
Any pitfalls, please let me know.
Your help is really appreciated.
Hi there Diesel, we have just entered into an iva which was agreed last wed- oh the joy, we had all these feelings you are having now.
Our process was smooth i rang all creditiors and explained our situation as we hadnt enough money to pay into our loan, and banks so we set an arrangement up with them, all credit card companys will do this i&e details, MBNA was our biggest and we feared them the most and they was fantastic i was lucky to have dropped on the right girl at the end of the phone- she was soooo helpful, 2 days after recieved 2 letters , 1- saying sorry to here your in this position etc etc,2- saying we have froze your account from all charges and interest, with having 3 children our self we started buying bits early and putting a little amount on gift cards weekly, any bargins i see i buy hopefully we will be better off now as we was living off such a small amounts monthly hence overdrawn, missing payments etc.
That's fine. If you are applying for an IVA - you will most likely be advised to stop making payments to creditors except priority payments. There is no point in getting into problems on new account with Coop. The reason you are here is that you cannot afford your commitments . Something has to give until you get yourself sorted. The surplus at the end of the month should either be saved or used to cover essential things you will have to pay in the future. i.e car service to avoid unexpected bills when in IVA.
Hi Winter,
Yes, I contacted Ramsey-Lomax and had a lengthy chat with them and provided details of my debts, income etc. They then put me in touch with RSM Tenon who are now waiting for me to provide the statements of creditors and wages slips etc. Should be able to send them over to RSM tenon in the next couple of days, then it will go into the drafting period.
Really stressed at the minute, especially with Christmas coming etc
We have set an savings account for all surplus to be paid into incase we need it for car etc, Gotta say it feels great to have an account with money in and not overdrwan
Well, Diesel, sounds your on the right track. You may find you have more disposable income this Xmas so don't worry. Everyone on here will help with queries you have . May I ask what figure of debt you currently have ?. How many creditors?. My advice is just don't bury your head in the sand. Debt worries get everyone down but the mere fact you are on this forum and addressing it is a real positive. Things will improve and its's only MONEY!!. Life is one big rollercoaster. I'm taking one day at a time. Will be much happier once I have my IVA accepted. Fingers crossed!
Accumulated debt with Credit Cards, Overdraft & Personal Loans is in excess of £38k to 5 creditors in total.
It's really re-assuring to know that advice is out here and thanks for taking the time out to respond back.
hopefully we will be better off now as we was living off such a small amounts monthly hence overdrawn, missing payments etc.