Starting an IVA what to expect?

SIRENS

Hi
I am in the process of setting up an iva through Pay plan,
I have opened a new current account with M&S will this be okay or will they close it when they find out? I have not asked for an overdraft and currently hold no accounts or debts with M&S or HSBC.

I'm hoping to get them to switch my credits and debits across.


Also pay plan are sending out a field agent to my house to collect copies of paper work, how long will they be with me (I forgot it was half term then and the children will be home)

I feel nervous that it will all go pear shaped and be rejected. Am still worried that I have made the wrong decision but I see no other way, I have debt of 21k and a dmp would take just shy of 20 years, I want to stay in my house as I couldn't afford to buy anywhere else and we wouldn't get much if we sold up as it needs lots of work doing on it.

Also 1 more thing my salary goes into my current account which is my largest debt at 16k, the overdraft fee of £90 is due the 2nd of June which I cannot afford to pay, I have just been paid so am not due to be paid until the 20th of June but what will happen as I will be overdrawn will they take it from my salary meaning I would be £90 short next month due to off setting? Sorry not sure if any of this makes sense?

Sorry for the ramble!

amyjaj

I just transferred everything over to my new account. Direct Debits, Wages etc.

Foxy-Stoat_3

Transfer your wages to your new account as soon as possible and empty the old one. Make sure you pay your mortgage though.

Whats your current salary and what is your interest rates on your debts?

How much equity do you have and are you on a repayment mortgage and are house prices going up in your area?

Have you tried to reclaim PPI? If you can get some of your debt knocked off from the refund are you able to make some lifestyle changes and clear your debt normally, maybe transferibg to interest free cards?

SIRENS

Hi Foxy-Stoat
I have to tread carefully as my wages go into my current account with the 16k overdraft which is charged at £3 per day (this is without clearing any of the debt) however I also work for the same bank. My salary is around £1100 pm, I was managing okay I have around 4k on a couple of store cards, catalogues and credit cards. Dh had a pay rise of £20 pm resulting in our child tax credit being cut by £175 pm down to £25 and this in turn resulted in us losing council tax benefit raising it back to £120 pm.
Mortgage is half and half house prices are good but our house needs lots of work.
I have been advised to go down the iva route as this would have no impact on my job, also never took any ppi on anything.

Foxy-Stoat_3

Are you 100% sure it won't effect your job? Who told you, and what does your contract say?

What do you mean, mortgage is half? Do you have a LTV of 50%?

Any way you can get the overdraft on zero % credit cards and try and pay them down, make lifestyle changes, no Sky, down size cars, move to a cheaper area?

Will this be a joint IVA?

You could talk to other halfs employer and get them to reduce his wages ?

Just a thought.

SIRENS

I spoke to my hr who put me through to pay plan to help me.
My mortgage is on half repayment half interest only, Ltv way above around 80%.
Not a joint iva just in my name even if they reduced his salary i believe tax credits are worked out on last years salary so nothing will change straight away, and I will never repay my overdraft it would take years, we already have a very limited life style, no holidays for the last 5 years, 1 car which is fairly old but in good nick, not much else I can cut back on.

Foxy-Stoat_3

Well good luck, you may have your IVA extended another year if you are unable to release equity on year 5.

You should remove all the cash you can and stop paying the creditors as soon as you can and wait for the fallout, subject to the meeting with Payplan.

Not sure how your employer is going to view it if they are one of your creditors but you will have to wait and see. If it gets rejected then bankruptcy may be the only other option if DMP is not a road you want to go down.

UpToMyNeckInIt

A word of caution regarding your new bank account. HSBC are notoriously hostile towards iva customers and WILL MAKE YOU CLOSE YOUR ACCOUNT once they find out about your iva. They regularly trawl the insolvency register, systematically getting rid of us undesirables.

I did the same as you, but I opened a 'First Direct' account. 4 months into my iva, I was given 30 days to find a new account. Lots of similar reports on this and other iva forums lead me to suggest that this is not a handful of isolated incidents.

Switch to a firm like CoOp, Barclay's, Santander or Nationwide. I know it's a pain, but do it now before your iva is in place or you will then be limited to a handful of naff basic accounts.

SIRENS

Thanks for all your help

I hope the iva is not rejected, I feel on tenterhooks and which it would hurry up so I know either way. I will go down dmp if this doesn't work as I think bankruptcy will be a definite nono with work.

Have to stay clear of Santander and nationwide as they are 2 of my creditors but will take a look at Barclays and co op as well just in case.

UpToMyNeckInIt

...yes, I remember the initial stages of the iva process and all the uncertainty. Personally, I made sure I kept up minimum repayments until I knew my IVA was approved, just to avoid default notices etc. if it did not go through.

Fingers crossed it all goes OK for you. Sounds like you have carefully thought through the alternatives - none of which sound particularly viable I have to agree.

longtermplanner

If you are going down the DMP route if the IVA doesn't get approved, then there is a lot to be said for having defaults on your account, as these will then drop off after 6 years.