It is customary for you to start making contributions before approval as it
1. Demonstrates an ability to pay and so gives credibility to your proposal
2. Gives the IP a bit of comfort that he will get paid for his services
3. Your contractual obligations only take effect once the proposal is approved. Therefore if you have made payments before approval it does give some room to manoeuvre if you encounter a short term difficulty.
Check whether the IP will refund them if the IVA is rejected
If you are talking up-front or set-up fees, then in the context of a consumer IVA, that's a complete no-no. If you are in business then you are in a totally different arena and it's likely you will need to come up with a deposit for costs.
HTH
Last edited by ianmillington on Fri Nov 28, 2008 2:44 pm, edited 1 time in total.
Ian Millington
Insolvency Director
PDHL Ltd (formerly Personal Debt Helpline Ltd) www.pdhl.co.uk
In my practice, we always ask for the first payment in advance at the time our client signs their proposals. As Ian says it shows commitment, and an affordability which is important to us from an early stage. If the IVA is not subsequently accepted, albeit this is very rare in my experience, the monies are refunded back to the client.
I also operate the same policy for business or self-employed clients as well, unless there is a real need to secure costs in advance.
