Debt Questions

Well I have made contact with PayPal now and given them all my details regarding my creditors and income. They said that an IP should get in touch in about 3 – 5 days. They have suggested an IVA jointly between me and my wife. So now that the ball is rolling I would just like to hear any advise on what the next steps and likely timescales will be:-

• How do I deal with my creditors whilst this process is going through. Can I just make reduced payments that are affordable until the IVA is agreed?
• I need to change banks next, the choices I have are Nationwide, NatWest or Lloyds TSB, any recommendations?
• My monthly payments will be £844, total income will be £2’500.00 and the debt is about £70’000.00. Do you think this is a reasonable amount to pay?
• How long do you think it will take until the IVA is agreed and set-up?
• Finally, do I have to answer the phone to my creditors or can I just communicate via mail?

Thanks in advance for all your help and I will keep posting on any updates and how I get along with this.

hi blu40
i didn't know you could do an iva joint ? check this out first iva stands for indivual vol arrangement you may be doing seperate ones. as regards bank accounts look at the co-op cash minder has no ties to any other subsidery bank and you get a visa debit card and can pay monies in via post office with chip and pin. as regards your monthly payment of £844.00 seems too high, have you done your i&e correctly that leaves you per month with £1656.00 left to pay rent /mort, food living costs car fuel bills clothinfg etc don't forget when you sign the forms you are in it for 5 years. to give you an idea i owe 40k and i am paying approx £265 per month. iva takes approx 6-8 weeks to set up depends on the case. and as regards the creditors pay them a £1.00 ea per month it makes no difference if you pay more because it will get swallowed up in interest. tell them you are in the process of an iva and as soon as you have the refference number you will pass it on to them. don't be bullied by your creditors they are mainly call centre staff trying to earn commision( i knew someone who worked in one and she told me its a game to see who they could bring close too tears over the phone and cough up the most money to pay there bills) not all are the same but most of them are. be strong and hold your head up high you have done the right thing. just a quick note why paypal i think they work on behalf of the c/c companies and banks because it hink they are funded by them and its in there best intrest to get as much money out of you as possible tp pay back the debt don't leave yourself short £844 sounds an awfull lot i was thinking closer to £500.00 per month but it depends on your i&e don't forget 5 years is a long time... look on the iva forums and get a feel for what other people are going through look around for other i ps as well melaine giles at jones giles was my savour and strength when i am going through the mill. let me know how you get
i

It looks as though you are being asked to pay about 72p in the £ (actually less to your creditors, because Paypal (and any other IVA provider / IP) will take approx 6 to 8k at the final payout.

As desperate dan says, it's all down to what you have in your I&E statement, so there's no right or wrong answer as to what individuals pay in their IVAs - some go much higher % than yours, many go considerably lower, it just depends on income versus necessary expenditure. They can also change due to your circumstances over the 5 years... mine started at 47% payback (of over £160k debt!!) but actually and unexpectedly ended (successfully) after only a year, when the creditors accepted a 27% full and final offer (which the IP arranged totally - he even helped to work out how I could get hold of the 27%!).

Obviously, its important to chat this over with your IP: mine was wonderfully helpful (despite my fears to the contrary) and actually increased some of my original expenditure figures.

Do you have to raise any equity after x years (or don't they do that anymore, now the house price crisis has hit!?) Obviously if you do, that will further increase your % figure, but as you don't mention it, I presume you don't have to do so.

Best of luck with your IP interview...

Right PAYPLAN is the name. Paypal is I believe a secure method of paying over the internet

Payplan do NOT do joint IVAs. They are individual voluntary arrangements but they will be linked obviously as the budgets have to reflect each other and so forth. And for convenience you would make a monthly payment when and if the IVAs are approved as Payplan charge no upfront fees. Also the fees - which all IPs charge incidentally as like the lunch there is no such thing as a free one - are taken from the monthly payment after approval so there is no extra payment to be made. IPs are paid and paid well for their expertise in writing off debt and protecting assets.

Can you afford the payment you are being asked to make if this is agreed? If not, then you should not even attempt to try it. If you can and debt is being written off then it would seem logical to pay it.

Remember the Common Financial Statement guidelines are used to work out a sustainable budget and when the IVAs are being set up the IP is acting as your nominee. That means he or she has an obligation to you, to put forward the best possible options and payment for you and to the court that this proposal is realistic and sustainable. If it isn't, they have to explain why! Once the IVA is approved then they become your supervisor and as well as the obligations to you and the court, they have an obligation to the creditors to collect the money you said you would pay in the proposals.

Until the IVA is approved you will have been advised to make token payments to your creditors on a monthly basis. This should be what you can afford and if you have a bank with a loan they may try and take the full payment out anyway until you have opened a new bank account somewhere you have no associated debt. If you have not been told this already, I am very surprised.

A reasonable amount to pay - only you know whether you can afford this. It all depends on what your priority payments are - every one is different. It is not to do with the level of debt really - although sometimes the payment is too small to make an IVA proposal realistically acceptable to creditors. They blithely advertise about paying back 25p in the pound but it all depends on the money YOU have available. If the amount is unaffordable this should be discussed with your case officers.

An IVA can be set up in a little as five weeks or can take much longer. It depends on how quickly you can respond to requests for information, how quickly creditors respond, if you have a mortgage how long it takes to get the valuation and so forth. We think about six to eight weeks for employed clients and about 12 weeks for self-employed as they need to get accounts etc together.

Hope that helps.

Sorry, my mistake. It is Pay Plan.
The IVA company gave me 2 figures of £344 & £500 so I was wrong in assuming that it was a joint IVA.
Dan - Thanks for the tip re the CO OP, I have called them today and asked them to open a 'Cash Minder' account, only strange thing was that they said I would have to call them back next week to see if a decision is made.
Sadly this month I won't now be able to get my pay into the new account, due to the wait for the Co OP. So I will as suggested make token payment of what is affordable. Am I correct in saying that I need to enclose a covering letter & Income/outgoings list explaining that I'm activly arranging an IVA and request intrest & charges to be frozen?
I think the next 2 months could be a bit messy whilst Im waiting for the decision for the IVA.

No as Payplan will be contacting them to let them know - you make the token payment and then send them a letter saying you have done so as Payplan are looking at your details and as soon as you have any further information you will let them know and are making monthly token payments as a sign of good faith in the interim.

hi blu40
as regards the co-op bank account i went to see mine personally, now my credit rating is shot to pieces, however i gave them my name address etc within in minutes they opened it and sent all the stuff to my home address yipee. just one question do you own a property if so is it in neg equity. if you don't and are renting would b.r be an easier route ?

Whoops, sorry Sarah!

Mind you, happily I do use Paypal a lot these days, thanks to my old (completed) IVA (never ever borrowing for my internet buying, I hasten to add!!)