I have several questions about bank accounts

[Kirsti]

I have several questions. With our 'safe' bank account we have an overdraft, I have been told to cancel the overdraft but I am unable to for a few months as we are using it.... will they check if it is cancelled or just the bank balance prior to the iva agreement. Also, will my childrens bank accounts come into the equation

[Cath]

Hi and welcome to the forum.

Are you currently going through the initial stages of IVA proposal?

If so,yes, you will have to cancel the overdraft facility on your new bank account. You should be able to put some money aside from the payments you are not making to creditors whilst your IVA is going through to keep you going for a while and to build up some contingency money.

If you start to use the overdraft facility on your 'safe' account and are not as yet in IVA, it will end up as being part of your IVA as it's a debt.

I am sure your children's accounts will be fine provided they are in your children's names.

[Niobe]

I agree with Kath - this account will be part of your IVA as it is a debt unless you can pay it off beforehand.

I would suggest opening another new account, something like a Co-op Cashminder which doesn't have an overdraft facility at all.

As regards the kids accounts, are they with a creditor bank and whose name are they in? If your name is on there and it is a creditor then they could take the money to offset against your debts.

I'd suggest either moving them or taking your name off if that is the case.

[Kirsti]

Thank you.

The accounts are in the childrens names and they also have premium bonds however they do have my name on as well as they are all under ten years old.

I have also been putting some money aside each month for emergencies, will they 'find' this? I need some money in case my car goes pop and I will be unable to work..

If we are not using our overdraft at the point of the iva meeting/check, will it still show that we have an overdraft?

I have heard that the hsbc will close our account if they get wind of the iva..

My other concern is that my husband has use of a credit card for work, this is an account in the company name but his name is on the card. He cant use this for anything other than work purchases but will they find this.

we have been in a dmp for 5 years already however the plan was to move to an iva, we are almost there now but now I want to pull the plug if it will jepardise my savings, kids accounts and husbands work. I knew it wouldnt be easy but I just want to cry.

[Kirsti]

ps, the kids accounts are with nationwide and totally sep

[Muggins]

Hi! Try not to despair and I know that's not easy at this time! Are you in a position to pay off the overdraft? If so I would do this if I were you as like the others have said it becomes another debt! You really ought to be trying as hard as it may be to live within your means as that is the purpose of an iva too! If your current account is with one of your creditors then you would be wise to change it very quickly as they may take your money to offset any debt you have with them! You will probably need to declare any savings you have and your ip will be able to decide if these need to be offset also, but they also do encourage you to have a contingency fund so may say to keep it! Your husbands credit card should be fine as it is in his companies name and used for work purposes only! Good luck with everything! It will all be ok so try and keep smiling )

[Kirsti]

I could use my savings to add to our account (which is totally sep from debt), but keep the overdraft as our emergency fund? I really dont want to have to change bank accounts again as we changed to hsbc to be safe. We dip into the overdraft due to fluctuating pay dates...so if i did that we wouldnt have any savings, or any overdraft debt (but would they still see we have access to the overdraft, its not huge..) it is good to have access to others in the same situations, I have felt that we were the only ones. Do they 'look into' all this stuff at each annual review?

[Muggins]

Once bound by an iva you are not allowed to have any credit in most cases! HSBC may hear of your iva and cancel any overdraft facility anyway! When you work out your I and E for the iva this should include a contingency fund! It's very difficult in the first couple of years but eventually you do get used to rigid budget ties! Hopefully you will not require emergency funds and if so would be best to ask for payment breaks! Living within yours means is the 1st thing you should do though

[Muggins]

Sorry meant to add you really are not the only ones! This forum is great for support etc! An iva isn't easy believe me but now we have come out the other end we feel brilliant! We have never in our married life been so well off so it really is worth the struggle whichever route you take! Please do try to remain debt free without overdrafts etc as this will only add to your stress during your iva!

[Kirsti]

We have done our i and e, it didnt cover anything contingency fund wise. We have been in a dmp for 5 years so I am used to the budget, with the job I do my income fluctuates alot at specific times of the year.. august is the worst month and that is why the overdraft would be used.

[Muggins]

We were allowed £50 in the contingency fund each month! Does your ip know about fluctuating paydates etc as this should be built into your affordability each month! Sorry I know you are aware of budgets etc having been in a DMP so don't want to teach you to suck eggs, it's just being in an iva is alot more restricting and legally binding so you do have to be very careful especially if borrowing more money!

[Ivoryfalcon]

HSBC are well known for monitoring various gazettes and registers, including the insolvency register. as soon as your IVA shows up they will probably close the account. I would make provision now to enable a smooth transition ready for your IVA.

I'm not sure about the Childrens accounts, hopefully an expert will be along soon to comment on that one.

Regards

[Kirsti]

I think I will email them now and ask them to put the whole thing on hold while I ask them questions. It has taken me two years to build up some savings (which is also my safety net) and I am scared to lose it all now. I feel like I am back reliving all the stress that initially pushed me into contacting re a dmp. The relief has been immense and now the stress is all back again. It is due to be heard 19th july, although I had a brief email yesterday to say it has changed to 3rd july (am assuming they meant august)

[Kirsti]

Oh god, thanks Ivoryfalcon, I will withdraw my savings today and call nationwide to open an account, although I dont hold much hope as hsbc wouldnt let me open a business account.

[KAYKAY]

Kirsti.... it is essential you ask for more time to understand and plan for what you are about to enter into. Contingency funds can be built into you I&E so you need to check this out. I don't feel from your post that you fully understand the implications of your IVA (sorry don't mean to offend) as if all had been explained to you properly, then you would know that an overdraft in an IVA is not allowed. It might not be too late to take some further advice, maybe from alternative companies. There are many who post on this site and some come highly recommended, such as Melanie Gile, Cleardebt and McCambridge Duffy to name but a few. Please ensure you understand everything before committing. 5 or 6 years is a long time to spend with a company you are not comfortable talking to.