Paying Creditors Whilst Starting An IVA?

beetlenash

Hi, I have just started an IVA but most of my creditors which are unsecured creditors will be expecting payment around the 25th of the month, I was advised by my debt counsellor to not pay them as he said what is the point as you can save the money for when the IVA starts and I see what he saying why struggle to pay again this month when they will get a letter in a few weeks informing them about the IVA, but part of me is worrying if I don't pay does that look bad and what if they don't agree to the IVA I'll be in even more trouble trying to repay the debt. I also have an unsecured loan which comes out of bank via direct debit on the 25th should I cancel the direct debit as its £349 which is a lot to lose if I pay again but again does this also look really bad if I cancel and don't pay? hopefully I can get all the information back to the case administrator before that date so they will know but has anyone else been in this situation and not paid?

National_Debtline

Hi beetlenash

Just to be clear - you won't have "started" the IVA yet if creditors haven't been informed about it.


You're presumably looking at setting up the IVA because you can't afford to maintain commitments as they currently stand and every month that you try to pay them is creating further strain on your finances. That being the case, why would you try to pay them again in full this month?


Whether it looks "bad" to creditors is neither here nor there. When they are asked to vote on whether to accept an IVA proposal, they will not be micro-analysing how you have dealt with them up to that point. They will simply be judging whether the return they will get is preferable to what might happen if they reject it and run the risk of you stopping payments altogether and going bankrupt, for example. The firm handling the IVA will only put forward a proposal that they expect to be approved by creditors, otherwise that firm will have wasted their time and energy for nothing.


Whether the IVA is right for you I cannot say because I don't know anything about your particular situation. The only thing I do know is that you're struggling to pay your debts, in which case the first thing to do should be to cancel those Direct Debits and get some independent advice from one of the debt charities (if you haven't already done so).


Dennis
@natdebtline

memberme

i was advised the same and told if they called, to tell them that you were entering into an iva and they should deal with the company...give a name etc.

I had no problems and the odd CCard company that called were obviously used to it and didn't moan. They will try and extract a smaller amount sometimes, but stick to your guns and refer them.

Iwas with cleardebt and advised by David Mond, one of the main pioneers of good iva practition.

You obviously need to be sure in your mind that your going for the iva and the iva company has been informed of that and are starting the ball rolling.

memberme

Sorry, my memory failed me, I was told to pay a nominal amount of £1 to all ccards and cancel DDB. You will need to make sure you have a new basic bank account set up if any of your debters are linked with your curerent account holding bank, I used COOP and got a normal premium account, but they do a basic. If you swap before the iva is fianlly setup it wont show on any searches

sourcrates

Totally agree with National debtline above, you are over thinking this just a little.
Your creditors won't care one way or another how you've handled your accounts prior to now, it's purely a Buisness decision that they will make.

Cancel all your DD's and save yourself a bit of money.

Good luck with the IVA.