We are just about to start the IVA process and have been told to cancel all direct debits for loans and offer a token payment. Do I send a token payment when I receive a letter from the loan companies to say the DD has been cancelled? Do I tell the loan companies that I am starting the IVA Process?
Hi Bush67 and welcome to the forum. Cancelling all direct debits and changing banks if your bank is a creditor is pretty normal to happen early on in an IVA journey.
Token payments are actually up to the individual, I personally made none and my IVA was approved, however, I fully appreciate others make these and feel this is the way for them.
I would inform the loan companies of your intention to begin an IVA and offer them a token pro rata payment at this point maybe?
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
As Lesley has said, stopping all of your payments to unsecured creditors as an absolutely standard procedure so you are doing the right thing.
Out of courtesy I would write to all of your creditors informing them that you are proposing an IVA and inform them of the details of the IP you are working with. In terms of making token payments, this is really personal preference. However whether you do or not will have very little bearing on the outcome of your IVA.
Sorry to sound naive but do I wait until my next loan repayment is due before sending a token payment, as no doubt when I cancel my direct debits I will receive correspondence from the loan companies. I have about 6 direct debits to cancel, do you think my bank will wonder why I am cancelling them? Would it be better to wait until I swap bank accounts before cancelling the direct debits?
If you do online banking - most banks will allow DDs to be cancelled on line. you dont need to give the bank reason why you are cancelling the DD - if they asked - just say " accounts payed off " Chance are when you cancel the DDs you get a letter and another DD form from the companies.
I personally would not pay the token payment until next payment is due (again some people pay this /others dont. if you have not already starting transferring you account - now is the time to start,you can truthful state you "are not in a debt management plan" - Its worht also making sure your new bank account is NOT linked to you creditors in anyway.
Bush67 - we didn't make token payments. Instead we took the opportunity to gather as much money together as we could for a contingency to be set up before the IVA was agreed - it will give you a buffer to start off with, as once in an IVA you will find it difficult to build up large , or even moderate reserves for a rainy day!
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
I totally agree - you don't need to make token payments and I certainly didn't. It made no difference to the creditor meeting and you can save the money as contingency and also towards your first IVA payment.
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
Hello. I would definately cancel the DD. I have opened a new bank account and cancelled all DDs EXCEPT the loan payment as I thought they would not allow the payment to go over the overdraft limit & I didn't want the bank to realise our position until absolutely needed. A DD was for an insurance policy had been previously refused. However, they have allowed this payment to their own company and are now charging an extra £10 per day. I am absolutely terrified. Please don't put yourself in that position.
We were with HSBC and they used to take the loan payment every month, even though it was over the overdraft limit. They then used to put it back and charge me for the privilege! This was before the IVA and after I had changed accounts.
Don't be terrified Paula, speak to your IP company if you are really worried or ask away on here.
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
Paula, it is totally up to you what you do. Your IP would not be putting forward a proposal if they thought it would be rejected and the vast majority of them are approved these days.
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
Paula - we all feel the same at the start, worried, scared, the 'what if' syndrome. It is completely natural.
The forum is here for any advice and all the support you need so post as much as you want.
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
