www.iva.co.uk

Hi to all
Just reading some of the threads and saw a comment about not giving preferance to any creditors. I have a personal bank account which is overdrawn although within limit as well as a business account - again overdrawn. I have a credit card with the same bank which i am up to my limit but making minimum payments as i am worried about right of offset if i do not. As i have several credit cards and a loan with other creditors am i then preferring my current bank - and what are the impications of this for me - is it ok to go on using these.
many thanks

Hi,

If your bank is one of your creditors, then you need to change your bank account as soon as possible to one who is not, Co-op and Yorkshire Bank are recommended.

If you are going to make token payments, then you should make them to every creditor to be fair.

Otherwise, on the run up to an IVA, don't make any at all. It will make no difference to the outcome.

Change your bank though.

Ok but as i use a business account this is not so easy.

Dependent upon who your bank is, you may find that they close the account anyway once you enter an IVA.

Others may not let you keep a business account. You will not be able to have an overdraft facility anyway.

Ok i realise that - but until I set up account with other bank i need to use it so I am a little worried as to how they will react if i leave it with an overdraft knowing that i am goin for IVA

Are you looking to propose an IVA if you are it would be a good idea to move away from your bank and join a bank with no connection. The offset rule can apply so be aware x karen

Get yourself a new account asap and then sort out the other one.

The bank can, and will, take full payments for your loan from your account, even if you cancel them.

Ok thanks guys - but i suppose my main concern is if i use it up until I "jump ship" and leave it overdrawn, what view will they take - it seems a bit dishonest to me

Which is why you should move.

If the bank then decide to take the money out, that is down to them and it will all be swallowed up into the IVA anyway.

It's not dishonest, it's their fault if they do that.

Ok but my point is I am still using the account for payments etc

You have a very limited option your not being dishonest and whilst running a business you need the bank account. Also when you make your IVA proposal there will be a history to how you found yourself in this position (mine did). Owing money is not criminal but all of us have struggled with our consciouses at times. You owe money to other creditors they are know different.

If you have a reasonable credit rating, you may be able to open a business account with another bank.

Once you go into an IVA though, it is doubtful you will get one and your current bank will most likely close the account anyway.

Ok thanks perhaps i am just having a panic - I still not sure which path to take - can i ask another question - If i enter a DMP do i have to include all creditors?
Can i negotiate individually with creditors too?

If you do a DMP you should include all creditors, but there is nothing stopping you from negotiating seperately if you wish.

A DMP is not a legally binding arrangement, and there is also no guarantee that your creditors will freeze interest or charges.

Ok thanks - i am keeping you busy tonight - one final question - until i decide what then i take it that there is no problem with me continuing to operate my businees and personal accounts in overdraft even if the become swallowed up by dmp or iva at a later date