TOKEN Payments

[markss]

I am in the process of arraing IVA and are stating to make token payments to creditors to show goodwill. Eversheds acting onbehalf NR have been sendinf letters etc /phone calls insisting i keep up payments which are unrealistic. i have made a token payment this week of £20 and will next month. this was done via there telephone payment line. whilst i have not agreed this with them surely the fact im making small payments should stall them from taking legal action any advice? thanks

[stoney]

Hi markss

We applied for an IVA through Melanies firm and made no token payments at all throughout the arrangement process. The most hassle we had were the telephone calls and we poltely advised whoever was on the 'phone of our IVA application. Most Creditors were ok with this and the phone calls are from Collection Departments who I understand have targets of payments to collect on which they receive commission. We didnt have any threats of legal action and it was in the latter stages of the application process that a couple of our debts were passed onto Debt Collection Agencies. We just kept them updated and they were ok with it.
Goldfish were one of the worst for ringing but we quite often found that when we answered the phone no-one was there as the calls come from abroad. Good luck.

[markss]

thank you for the feedback

[carlmcmullen]

This subject is brought up many times and you will find different companies operate differntly.

I would normally only suggest token payments are made if Legal action is already taken place, if not then i would not suggest it (but others may tell you different)

Normally to take legal action would take 2 - 3 months and have you have had sign of it yet i dont think it will be a problem. Creditors have an obligation to contact your by post when you miss payments so it is normal and as Stoney said if they call you all u need do is politely explain your situation.

[MelanieGiles]

The reality of this issue is that it makes absolutely no difference at all whether you make token payments or not to the outcome of your IVA. I personally recommend that payments cease to ensure that all creditors are treated equally and to allow my clients to get a little bit of capital behind them before entering into a rigid repayment plan. But if it means that by paying £10 or £20 to stop nasty phone calls and letters, thus bringing a temporary peace of mind, then so be it - go ahead and pay. But do beware that once the creditors know that you are a soft target, the intensity of their calls may increase, expecially if you are laising with debt collection companies rather than the lenders themselves.

[markss]

thank you all melanie had a valid point re treating all creditors equally. i justwant to avoid a debt collector at my door siutaion as i share my house.