IVA New Bank Account & Overdraft

Fozzy123

Just applied for IVA. I am a homeowner with 3 young kids & 60K combined debt with my wife. We're awaiting our creditor meeting at end of this month. We've managed to keep up all payments up to now, but with nil left to live on, and using credit cards for essentials, so advised that IVA was the best course of action. I have applied for a new bank account with an unattached bank just before the IVA was proposed as recommended, but have been given an overdraft of £1K - I guess as credit score was still good at that point. I have asked for it to be removed, but this has not yet happened after nearly a month. Could this land me in hot water with my creditors and lead to IVA being rejected? As I understand it, the new bank need not know i'm in an IVA, so I guess if I dont use this overdraft i'll be ok? I have told my insolvency practitioner, who has asked that I just not use it. Is there any way my creditors could get wind of this and reject the IVA proposal on these grounds? I'm panicking about this and would be grateful for any advice....

Mercyknight_2

I seem to think that your new bank will at some point find out you're on an IVA anyway and will probably remove the facility, that's what I've picked up from other posts. But I'm sure someone who knows more will be able to confirm either way.

d3matt

It's likely that your bank will close the account. They did with me.
I then had a battle to find a bank who would accept me. I finally ended up with the Co-op cash minder account.

Max_Maxwell

If the bank is not one of your creditors then I see no reason why they would withdrawal the facility. They're not going to be party to your IVA.

However, there are restrictions in an IVA regarding new credit, so as long as you don't use the overdraft, you're not in breach. As it's difficult obtaining a 'normal' bank account post-IVA, my recommendation is to keep this account ticking over - you just need to show activity on the account by transferring funds in and out each month - and then when your IVA is over you have a fully-functioning bank account to take advantage of.

Do your best to keep this account live and active just don't take up more credit.