Debt Managment Plan/IVA? Is Halifax part of Lloyds?

Sweet13utterfly

Hi all

I am currently looking into going into a debt management plan I've spoken to Step Change and they said they could set up debt management up for me and my £6,000 debt would be paid off over 7-8 years with no fees as they are a charity.

Then I got a phone call from another company called Debt Free Direct who said they could offer me a IVA and it would be paid off in five years (rest written off) also no fees. Has anyone any experience with either of these companies?

Also both companies agreed I had to close my Lloyds bank account as I have a Lloyds Loan, was looking to open a Halifax account because you get £100 if you join at the moment but then I noticed it was part of the Lloyds group. Does this mean they would also have the power to remove money from my bank account? And if so which bank should I go for?

Any help would be really appreciated, feeling very over whelmed right now!

Many Thanks

Laura

notavillain

Yes Laura, Halifax will freeze your account if you go into an IVA natwest or Barclays are good options

UpToMyNeckInIt

With respect, with only £6,000 debt, an IVA is most definitely NOT the way to go. Remember as well, that it is a form of insolvency, which in turn potentially puts all sorts of restrictions on everything from the ability to open a bank account, or even get a mobile phone on contract.

There are fees (£2000 to £3000 ballpark) attached to ALL IVA's - you just pay them as part of your Monthly contributions. That's fine, unless your IVA fails, and then you are left with your original debt AND your IP's fees on top.

I am assuming that if you are struggling to repay a £6k debt, you are on a very low income, possibly state benefits, and hav no major assets like property or an expensive car to protect.

My initial advice then is to scrape together £90 (or even elect to pay this in installments) to fund a Debt Relief Order - another form of insolvency, that will write off everything pretty much straight away.

I agree that 7-8 Years is a long time to commit to a DMP, unless of course you anticipate a big improvement in your financial situation over the next couple of years and can repay it sooner).

With the insolvency options, your credit rating is utterly destroyed for 6-Years from the start of the process. However, this compares favourably with the DMP, whereby your credit rating is affected for the duration of the plan + 6 Years AFTER you final payment - so 13-14 Years in your case.

Have a look at the 'Debt Camel' website here:

http://debtcamel.co.uk/debt-options/

Thoroughly research all your options, and have a chat with your local Citizen's Advice Bureau as well.

Bank Accounts: You are right to be concerned, as you have debts with Lloyds, you would be best advised not to bank with 'Lloyds Group' in case they exercise their right to 'set-off' your debt by raiding your new Halifax account.

You need to open a full current account with a non-creditor institution now! (less overdraft of course). Best not to reveal that you are considering an IVA/DMP/DRO though (no requirement to volunteer such information).

Important to do this before you are on the insolvency register (relevant if you go the DRO/IVA route), as you will then be limited to a handful of basic accounts.

All the best, whatever you decide.

SPELLKASTER

Sweet13utterfly wrote: »

Hi all

I am currently looking into going into a debt management plan I've spoken to Step Change and they said they could set up debt management up for me and my £6,000 debt would be paid off over 7-8 years with no fees as they are a charity.

Then I got a phone call from another company called Debt Free Direct who said they could offer me a IVA and it would be paid off in five years (rest written off) also no fees. Has anyone any experience with either of these companies?

Also both companies agreed I had to close my Lloyds bank account as I have a Lloyds Loan, was looking to open a Halifax account because you get £100 if you join at the moment but then I noticed it was part of the Lloyds group. Does this mean they would also have the power to remove money from my bank account? And if so which bank should I go for?

Any help would be really appreciated, feeling very over whelmed right now!

Many Thanks

Laura

Dont touch Debt Free Direct with a barge pole.

Yes, Debt Free Direct DO CHARGE FEES.

Secondly I've been in an IVA with Debt Free Direct for 2 years.

I had to cancel mine because the greedy gits up my payments from £130 per month to £175 per month.

They calculated my DLA as income.

Because of their greed, I had to report them to the Financial Ombudsman Service.

I believe Debt Free Direct pressuried me into taking an IVA because I have since discovered my total debt and income qualifies for a Debt Relief Order.

I paid 2 years into this rubbish for nothing!!

Avoid Debt Free Direct!!

Sweet13utterfly

Thanks for all your help and advise guys, really glad I asked now! I've been trying to do a switch from my current account to another one but I keep getting declined because of my credit rating, so far I've tried nationwide, first direct (then noticed they charged £10 a month) and Barclays.

I have changed my working hours recently from full-time to part-time and even full-time the debt was at the point of nearly being more than my wages.

Thank you SPELLKASTER for your advice on the debt company, glad I didn't go with them after your experience, couldn't you change to one like step change or is it too late to do so?

Thank you for the link you send and your advice UpToMyNeckInIt I'll have a look at that now, seems a good place to start

Sweet13utterfly

Isn't Natwest part of the Lloyds group too?

SPELLKASTER

Sweet13utterfly wrote: »

Thanks for all your help and advise guys, really glad I asked now! I've been trying to do a switch from my current account to another one but I keep getting declined because of my credit rating, so far I've tried nationwide, first direct (then noticed they charged £10 a month) and Barclays.

I have changed my working hours recently from full-time to part-time and even full-time the debt was at the point of nearly being more than my wages.

Thank you SPELLKASTER for your advice on the debt company, glad I didn't go with them after your experience, couldn't you change to one like step change or is it too late to do so?

Thank you for the link you send and your advice UpToMyNeckInIt I'll have a look at that now, seems a good place to start

I've cancelled my IVA and I am waiting for a failure certificate to come through so I can apply for a Debt Relief Order.

longtermplanner

Sweet13utterfly wrote: »

Thanks for all your help and advise guys, really glad I asked now! I've been trying to do a switch from my current account to another one but I keep getting declined because of my credit rating, so far I've tried nationwide, first direct (then noticed they charged £10 a month) and Barclays.

It sounds as though you will need to apply for a Basic Bank Account, not an ordinary bank account. You won't be credit checked for a basic bank account. You can pay in wages and set up STOs and DDS but can't have a cheque book or an overdraft. Some won't let you have internet access, but AFAIK Barclays does.

An IVA for £6,000 is not sensible. Money Advice Service (a charity) says you should have a minimum of £15,000 in debt see https://www.moneyadviceservice.org.uk/en/articles/options-for-clearing-your-debts-england-and-wales. If you have a house to protect then I would be prepared to push that down a few thousand, but not as low as £6,000.