will I have to make a payment straight away?

[Donna]

If my IVA is approved on Wednesday, will I have to make a payment straight away? I don't get paid till the end of March

[MelanieGiles]

Hi Donna

That will depend upon your own IP's policy. In my firm we ask for the first payment to be made when the proposals are issued, but others may have differing policies. Check with your IP to be sure.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[steve532]

I had to send a cheque dated for the same day as my creditors meeting. But i guess if your meeting is wedneday you have not been paying any creditors for at least a 2 months? So why cant you afford your IVA payment???? I used this period to put a few pounds in the bank for an emergency fund.

steve

[Donna]

Steve,

I only started the process 3 weeks ago and was paying right up until then, things have happened quickly!!!

[steve532]

WOW.
That is quick, My Ip has told me as long as all payments are made they are flexible, ie if you miss a payment as long as you are up to date by your annual review they are happy. as I believe they dont send money to your creditors every month only when it reaches a certain amout. Good look at your meeting. Who was your IP? A very fast worker whoever he is.

steve

[neverending]

Its a WOW from me aswell !!!
Steve is right in that money is not pased onto your creditors on a monthly basis.It is infact not passed onto them until the end of the second year,your IP will ensure that their fees are covered first.
I suggest that you set up a standing order starting on the 30th March and monthly thereafter.This will be perfectly acceptable to your IP and creditors as you will have made 12 payments by the anniversery of your IVA.
Good Luck

[MelanieGiles]

Not true necessarily! These days we get paid on a pro-rata basis with creditor distributions - so no dividend no fee. I have always run my practice along these lines, and am glad to see the creditors insisting on such policy.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[neverending]

Well you don,t send payments to creditors monthly Melanie do you ???
You pay a dividend at the end of the year,correct ?? If an IVA failed within the first 24 months then what percentage of income received would you pay to the creditors ?? Would you not take all your fees upto that date and pass any balance onto the creditors ??

[MelanieGiles]

Not monthly, no - to do that would just not fit the spirit of formal insolvency proceedings and make the case completely cost-ineffective for creditors.

These days creditors are being really harsh about fees, and the pro-rata modifications are becoming increasingly common. I accept that some IPs have been overcharging, but generally fees in IVA's are pretty typical and tightly controlled now by creditors.

There is a cost to the procedure, and if the creditors want the job done properly they have to pay - otherwise we will simply lapse back to an unregulated debt management industry as good IP's will pack up.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[neverending]

Your going on the defensive again Melanie !!!
I wasn,t criticising fees,and its good to hear that they have been tightened up, I was merely stating that creditors do not receive any money until at least the end of year one[possibly two as in my case]
I stated this because i guarantee that "joe public " think that there monthly payment DOES go straight to the creditors, less IP fees.
Donna can be assured that as long as she makes the twelve payments prior to the anniversery all will be ok.

[scaredkez]

i agree neverending (not having a go melanie) i think a lot of people think when they are making their iva payments each month that they are being distributed amongst their creditors and thats the point neverending is trying to make.
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/