We in the very early stages of the IVA proposal

[golfkpy]

We in the very early stages of the IVA proposal and was wondering is it correct for an IVA firm to ask for a payment before we have agreed anything with our creditors.
They called us and put forward a monthly figure which we could afford to pay and then said they needed a payment shortly.
Is this correct ???

confused!!!!

[David Mond]

No in my opinion it is not.

My firm does not ask for any upfront payment.

You need to have a chat with another IP and give him/her details of all your personal and financial circumstances and particulars.

Visit www.iva.com for reviews on firms and practitioners and select one or two to have a chat with. Ask them if they want upfront fees!

They will give you the appropriate advice and it is free.

Let us know how you get on.

[Adam Davies]

Hi
Some companies, usually intermediaries, ask for payments before the IVA is proposed and accepted. These companies do not have in house Insolvency Practitioners. Some companies, as in Davids case, have their own IPs and do not charge an upfront fee.
Regards

[MelanieGiles]

There is absolutely nothing wrong with an IP asking for the first instalment to be paid prior to the IVA proposal being sent to creditors - but this should only be requested when the work has been completed and their client has agreed and signed the proposals. If someone is asking you to pay from the outset, you need to determine that the money will be returned to you in the event that the IVA does not eventually proceed, and these monies will need to be disclosed within the IVA proposal.

[David Mond]

Well my firm does not adopt that procedure and only gets the first payment within 30 days of the passing of the creditors meeting. This helps "cash flow" and enables certain pressing domestic repairs for example to be sorted.

[kallis3]

Payplan like you to make the first payment before the meeting, but if you can't, as in my case, then as long as you pay within 28 days they are happy.

[ricbro]

Payplan have told me to have the first payment ready for the date of my creditors meeting, I will have my Co-Op debit card at the ready on the 5th May

[kallis3]

We didn't have a cheque book or debit card (still don't!) so as soon as we were approved, I set up the standing order to pay them.

[Max]

I was requested to send my first payment along with the signed proposal to Melanie - I believe Melanie feels it demonstrates good will on the part of the debtor - I agree with that.

[flow13]

DFD didnt ask for the first payment until after everything had been agreed and signed etc, and then they asked us what date was best to make the payment, and we set up a standing order.

[golfkpy]

Thanks to everyone for the advice, its been very helpful[:)]

[David Mond]

I agree elv5 that it demonstrates goodwill towards the creditors but I really wonder whether that is the actual case since it is the creditor's agents in almost all cases that receive the proposal.

Does Mel include a paragraph within the proposal pointing out that you have sent the first of your proposed payments to your Nominee?

I believe a "breathing space" is necessary for those who come to my firm allowing them the opportunity to have a little "fund" to pay for example household repairs is perfectly acceptable from my perspective.

Normally people are in a terrible financial bind at the time of entering into an IVA and to suddenly have to find the first payment at the time of signing the proposal can be difficult.

I am not criticising Melanie here but there are good arguments both ways and I believe the commitment is the fact that the debtor is taking appropriate steps by proposing the IVA.

[Max]

I do not know about photographs - my husband was lucky since he did not pay the creditors that month he had the money to pass to Melanie. I can only say again what I have said before, our troubles seem pretty mundane compared with others. I am glad for their sakes you can help them and you certainly seem to have a high acceptance rate. J

[MelanieGiles]

I am personally getting a little fed up of having this discussion every time the issue of the timing of IVA payments is raised.

David - your firm take two payments up front from clients entering into a DMP with your firm, most of which I belive you take as fees - whereas other firms only take one. So what "breathing space" do you give people entering into a DMP with your firm as a matter of interest?

[ivas4us]

When I started a DMP with David's firm I didn't pay anything for the first month and then started paying from month 2. I hope this helps, I can see both sides of the arguments and just a matter of preference for the IP's and also the individuals.