www.iva.co.uk

Hello everyone.
I have been reading the forums for a few weeks now and have finally taken the first steps to applying to enter into an IVA.
My husband and I are in around £65,000 unsecured debt. We are proposing to pay back 60p in the £.

The IVA companies we have spoken to suggest we stop paying our creditors. We can just about pay the minimum each month but then really struggle with everything else like living !
Do you think we should stop paying immediately?
Make token payments?
pay some and not others? (ie the bigger loans)
Also if we stop paying, are creditors more likely to accept an IVA proposal as it will show them that we definately can't pay?

Sorry for the many questions and thank you in advance for any help.

Regards

Hi Monkey, and welcome to the forum. Whether you are up to date with your payments or not makes little difference to whether your IVA proposal is accepted. I stopped paying mine as soon as I started the IVA process. You should then expect the calls and letters to start though, whereas making token payments may avoid this. I wouldnt pay one creditor over another though, as this could be seen as favouring one creditor over the next. If you are struggling to meet the payments, I would take their advice and stop paying them - its hard to do as I had never missed a single payment ever before, but it makes your life and budgeting so much easier in preparation for entering into your IVA. Best of luck.

Hi Monkey

That's right we were in the same position. We never missed any payments but stopped completely when we had decided to go for the IVA.
The letters and calls will keep coming but once the creditors know you intended actions about the IVA they seem to understand.

Good luck with your IVA and let us know how you get on

Togetherforever

Thank you for your replies.
We will stop paying, at least we'll be abit better off each month whilst the IVA application is being processed.

When the credit card statements come through it'll be hard to dismiss them but in a strange way will be a relief not to pay them!

Thanks again

You say that you are just about making the minimum contractual repayments to your creditors. If this is the case, are you really sure that you need a formal insolvency procedure at all - or perhaps just a little leeway with the creditors to perhaps pay a slightly lower payment on an ongoing basis.

Could you confirm the amount that you will be paying into the IVA each month, with the total minimu, contractual repayments currently required by your creditors.

Hi Melanie

The proposal would be for £750 a month. We are currently paying £1200 a month for our unsecured debt.

We have no money for anything after paying our debts and mortgage, utility bills etc. We have had to borrow money off my husbands parents and then sell things like our computer, bikes etc to pay them back and give us a little money but we are running out of things to sell!
We are currently on a tracker rate mortgage which ends in a few months so our monthly payment for that will go up by at least £100.

Thanks

OK - that now makes sense, and shows that you are insolvency and therefore eligible for IVAs.

Do make sure that your IP builds in the projected increase in mortgage payments into your IVA, so your contributions are set to be lowered at that time.

Thanks Melanie.

I'll make sure that they are aware.

Regards

Monkey, I have deleted your new topic as it is a duplicate of this one.

Thank you. I got a bit confused and thought to post a thread I had to 'ask a debt question' I wondered why it didn't come up and then found out how to do it. Didn't realose it would come up again!

It's not a problem, I just thought I'd tell you what I had done in case you wondered.

The forum can be confusing at times!

There is an argument to just pay your existing creditors a token payment to stop the incessant phone calls that might start. Your chosen IVA company should advise you depending on the mix and match of your creditors and the time it will take to put your IVA in place. There is no hard and fast rule.

It can also work the other way - you make a token payment so they phone for more.

Hi Monkey,

Just another piece of advice, if your current account is with one of your creditors transfer to another bank asap. I had no problem getting another bank account straight away and make sure you take enough money to live on out of your current 'current' account until you next get paid...hopefully into your new bank. There is always a chance that if your current banking with one of your creditors they make take money ie still draw on a bank loan, or overdraft charges etc.

Regards

You have similar debts to us when we first started out in July 2007 - we are now 18 months in and the IVA was the best step we took in resolving our debts. For us we stopped paying our creditors and like you until that day we had not missed a months minimum payment - however we had had to rob peter to pay paul to do it ! We the calls stopped as soon as the IP wrote to them to inform them of the intended IVA - all bar one creditor then ceased their contacting us - we dealt with the one creditor who refused to stop by ensuring we had the number come up on our phone and then pretended to be an answerphone when we answered the call.......alternatively we just said the payment had been sent in the post the day before ! It will stop after a couple of months and all will be ok.

IVA life is a struggle some months, but very rewarding and a truly life changing experience - you certainly learn to handle money in a different way !