www.iva.co.uk

I`m at stage 2 of my application for an IVA. I have 6 credit card accounts with balance s ranging from 950 pounds to 14,000 pounds. How do I work out a token figure for payments to each of them? Any ideas/ experience.

This is an area on which even a lot of the experts have differing personal viewpoints and the right answer is that there isn't a right answer.

At this point I would stress that it won't make a blind bit of difference to the result of any creditors meeting whether you make token payments or not, so if you don't want to and set your disposable income aside as a little float, as it were, for when you start your journey then there is a strong case for doing so. Don't forget you will not have access to credit facilities, so if the car blows a tyre for example then you will need the cash to pay for it. You could, if you wish, make token payments of, say, £1 each and then set the remaining money aside, or you could go the whole hog and divide your estimated disposable income into a pro rata payment for each. Technically that may be fairest, but as I said before it won't make any difference.

On balance, my own preference is to give them all a £1 but you must make up your own mind.

Regards.

Good luck with everything and keep us informed how everything goes. 2012 will be a good year for you I hope!

I persoanlly didn't pay them a penny from the time I investigated the IVA. However, some good ideas there from Size5 x

I never paid any of mine, saved the money up as a contingency fund.

Hi Hyperdrive, Welcome to the forum. I would echo the advice above. I didn't make any token payments on a debt of £35k that was spread over 5 or 6 credit cards and overdrafts. In the 3 months it took me to set the IVA up I saved this money and used it to get car serviced and to have a contingency fund for emergencies. Up until that point all my credit cards, although max out were up to date.

Be sure to open a bank account with another lender before it's too late. That is if your current bank becomes one of your creditors. Coop, Natwest come recommended on here.

Good luck and keep us posted.

Hi Hyperdrive - we made no payments for the 3 months leading up to the IVA being approved. By all means if it makes you feel better, pay them all a token £1, but as the others have said, it will make no difference.

I wrote to all my creditors telling them of my intentions and asking them not to call due to my ill health and that made no difference either. In the end, just unplugged the phone and saved all the letters to be burnt in a big bonfire!

Good luck and let us know how things go!

Thanks for all your helpful comments. I have a new bank account independent of creditors. How do you keep a contingency fund out of the equation? Doesn't every penny have to be declared. I am self employed with a struggling business, but my wife has a good job with some personal savings... not a lot! It is a joint iva however.
Thanks once again... lots of advice needed - a stressful daunting time...

You are allowed a fund for emergencies while in an IVA. You can also.have savings if you can manage it from your allowances.

IP's would encourage a contigency fund, a separate account maybe whereby you transfer over any surplus monies. All helps for those unplanned eventualities that happen.

You can save on some allowances as well as if you receive any overtime your share can go into it.

It soon mounts up with putting a few pounds in here and there. Some weeks my shopping is less than others and I save it. x

I'm in the same position myself,felt such guilt when the first letters arrived,but looked at the advice on here and decided not to make a token payment,if it doesn't make a difference to the outcome

Hi I have been going through this since october I was up to date with payments until then, I sent letter to each creditor informing them of iva intention since then I have unplugged phone and send all letters to my poor ip! there are a lot of them! they upset me but I moan on here a lot which keeps me sane (ish) i have had car serviced, paid for insurance and have set up a contigency and also transfered my (fingers crossed)first payment to ip with the money i wouldve paid creditors ...good luck

You're doing well recovering!!!

The letters are a pain but you just have to let your IP deal with it now.

I sent my creditors £5 each. Wish I hadn't bothered because it made no difference at all. My advice would be SAVE IT for emergencies. Good luck x

I didn't pay a penny towards any of my debts for 6 months while we were going through the process last year, it wasn't an easy thing to do as up until that point I had always met every payment on time and in full, at the detriment of ourselves to ensure we could pay anything, so it was extremely difficult to just stop paying, but I was advised that it would make no difference so I decided to save the money instead, we got a few jobs around the house done that needed doing, the car serviced etc and then the rest saved as a contingency.