I have an agreed overdraft on my bank account

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jason503
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by jason503 » Sun Jul 23, 2017 4:40 am
Hi
I'm in the first year of my IVA but I have an agreed overdraft on my bank account. The creditor that this overdraft is with, was not part of my IVA. Can you tell me if I'm allowed to have this overdraft even though they were not one of my creditors? Many thanks.
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kallis3
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by kallis3 » Sun Jul 23, 2017 7:37 am
Hi,

You shouldn't really have one but, as long as you don't use it you should be ok. Alternatively you could ask the bank to remove it.
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Foggy
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by Foggy » Sun Jul 23, 2017 8:26 am
It's a thorny question and much will depend upon the opinion of your IP along with what you have drafted, in this regard, into your proposal. Many proposals allow credit up to £500, but this is usually regarded as being there to cover things like utilities, car insurances and the like where you owe the supplier the money whilst paying it in installments.

To further muddy the waters -- if this overdraft existed when you took out your IVA it should have been included as the bank was a creditor --- paying them back the monwy owwed in full, as you will, means you are unfairly favouring one creditor over the others -- which they will not like if they get to hear about it.

Personally I would quietly clear any overdraft and ask for the facility to be withdrawn to avoid potential problems later on --- there is always the chance that the bank will withdraw it when they cotton on too --- and that might be at a time not so convenient to you.
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Lisa Thomas
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by Lisa Thomas » Mon Jul 24, 2017 8:17 am
I'd be surprised if you were still able to use this but strongly recommend you don't without getting your IPS consent first.

Also consider why you would need to use it? If your payment have been calculated properly and no changes to your I&E then barring an emergency you shouldn't need to borrow money.
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