cancel monthly payments whilst setting up iva ?

[depressed]

hi i am currently in the process of sorting out paper work etc for an iva proposal of a one off lump sum payment of around £70,000 for our combined debts of £180,000,should i still be making payments to my creditors through a dmp plan that i have been in for the past 3 years ? or should i refer all creditors directly to my ip now that i have one ? I would value any advice so that now i am setting up my new bank account need to know if i should set up this d/d or not ?
Also i don't receive regular statements from creditors who are in the dmp i just get estimated balances from the dm company ,i understand i will need to gather correct balances for each account and there are so many ,i don't even have the numbers for many of them and some debts have been passed on to other agencies ,if i cancelled the direct debit to the dmp would this be a way of receiving all my balances and information ,when they write to me ,or is it just making the situation worse ?
at the moment i am finding it difficult to pay my dmp as my husband is self employed and its a difficult time of year for him as theres no work at the moment ,also i am going into hospital next week to have my 3 rd baby ,my other daughter is dissabled and and i have a 11 year old ,we are selling our house to offer a lump sum payment as you may be able to see we would find it difficult to guarentee a set monthly iva arrangement ,especially if my dissabled daughter has to go for more operations this year ,shes only 4 so needs us to be around for her .
Also the house we are selling is tiny ( one bedroomed ) struggled here for years !!! so that i could pay off creditors but dmp not doing much in the way of reducing balances .
i really desperately need to buy items for the rented place ,and for the baby ,such as cots ,prams ,curtains ,beds ,wardrobes etc etc ,the list is endless .
when we sell our home we are going to be offering all of the equity plus our endownment policy ,is this reasonable do you think ?,i have been advised that after all of the ip fees solicitors fees ,estate agents fees we will be offering around 37 p in the £ .
we don't feel that we would be reliable candidates for monthly repayments due to our circumstances ,we can just about get by but rent will be much more than our mortgage and as i say my husbands work can vary due to family issues and my daughters health issues etc thankyou for your time .
Trying to sort out what i can before i go into hospital to have the baby next week as i have to stay in for a week due to complications !!!! typical just when i need to be about getting on with the iva !!
sorry to babble !!!

[aguise]

Hi depressed. Ask the company sorting the iva to advise you on this.

Ang

Please visit my blog at http://aguise.blogs.iva.co.uk/

[pbeck]

Your Insolvency Practitioner should have told you if (s)he wants you to cancel payments to the DMP plan, I normally ask my IVA clients to stop making payments because 1. I need a bit of money to get the process started, 2. there's really no point making further payments on a DMP once you decide to do an IVA, and 3. usually it only takes 6 weeks or so up to the date of the creditors' meeting.

If they haven't told you, I suggest that you ask them whether it is OK to stop payments.

The one drawback of missing payments is that you'll start getting phone calls about missed payments, that's just something you have to live with while the IVA proposal is being prepared.

When creditors come to vote on your IVA proposal, they will take it on it's merits, and not be concerned by whether you missed a payment or two immediately before the IVA was put forward.

Philip Beck

Licensed Insolvenvcy Practitioner and IVA specialist

[MelanieGiles]

It makes absolutely no difference whether you make ongoing DMP payments, token payments or no payments to be frank.

From a personal point of view I do not ask for monies to be paid up front, as I prefer clients to ensure that they have a sufficient cushion to start off the payments as the next five years can be quite frugal. I do, however, like the first IVA contribution to be with me by the time of the creditors meeting and of course this does have to be funded from your new budget.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Adam Davies]

Hi
Welcome to the forum Philip,much appreciated
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[depressed]

hi melainie ,thankyou for your advice ,and thankyou philip ,but what about the amount of time it takes to put the proposal to creditors as we have our house on the market at the moment in order to put forward the lump sum ,i'm worried about action that could be taken against us during this period of time ,as i really need the iva to be aproved and don't want to ruin any chances of success .
my dad will help me out with shopping etc if i need to carry on with the dmp for a while longer .

[pbeck]

Don't worry too much, as I mentioned before the process takes around 6 weeks or so depending on how quickly you get all the information together for the Insolvency Practitioner (creditor statements, bank statements, bills, payslips, mortgage statement, valuation etc ), once the IP has all that preparing the proposal will be very quick, most of the time quoted is actually the notice period given to creditors for the meeting after the papers have been sent out.

The phone calls and any action usually stop once creditors have received the IVA papers even though the meeting may still be a few weeks away.

Because of the short timescale it won't be possible for the creditors to take any action against you, unless they've actually already started proceedings, if you're really worried about it you can ask your IP to apply for an "Interim Order" in the Court which stops any action while the IVA is being considered. However, most IVAs now take place without interim orders and because of the extra work involved your IP may charge you if you wish them to apply for it.

Philip Beck

Licensed Insolvency Practitioner and IVA specialist