{"id":2853,"date":"2014-01-14T16:17:52","date_gmt":"2014-01-14T16:17:52","guid":{"rendered":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/?p=2853"},"modified":"2019-02-21T16:30:47","modified_gmt":"2019-02-21T16:30:47","slug":"keep-bank-account-in-an-iva","status":"publish","type":"post","link":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/keep-bank-account-in-an-iva\/","title":{"rendered":"Keep Bank Account in an IVA"},"content":{"rendered":"\n

Most people maintain a current account into which their wages or salaries are often paid by their employer via BACS or by other such means. <\/p>\n\n\n\n\n\n\n\n

The current account is often also used for direct debit or standing order payments to creditors. This ensures that payments are made when they are due for a whole plethora of liabilities: mortgage or rent, vehicle HP, utilities such as water, gas and electricity, TV license, house and car insurance, life assurance, council tax, Sky and any number of such regular bills as well as regular repayments on credit card accounts or other unsecured loans.<\/p>\n\n\n\n

Many current accounts are checking accounts enabling people to make payments by cheque for one-off bills or for various purchases and they may also be furnished with cheque cards and\/or debit cards. These are some of the most convenient benefits of having a current account. The convenience is often enhanced when the account has an approved overdraft facility as many current accounts do. People can manage their day to day spending in a more controlled and flexible fashion when they use their overdraft facility sensibly. It means that when the account is overdrawn no penalties are incurred other than the agreed interest rates and fees, provided the agreed overdraft limit is not exceeded.<\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

If you enter into an IVA<\/strong>, you will be required to \nstop using all forms of credit except with the express permission of \nyour supervisor.   If your IVA is approved by your creditors, you will \nbe expected to cut up any credit cards or store cards you may have. \nFurthermore, you will not be permitted to obtain any new credit cards or\n store cards during the term of your IVA, which is frequently of five \nyears duration. Breaching this requirement will almost certainly lead to\n the failure of your IVA.<\/p>\n\n\n\n

The exception is that with the permission of your creditors and of \nthe supervisor of your IVA, who will be an IP, you may be permitted to \nuse a limited amount of credit in regard to payment for utilities for \nexample. You will also be permitted to hold a current account provided \nthat no overdraft facility is available on the account. However, with \nthe express permission of your supervisor, a nominal overdraft facility \nof perhaps up to \u00a3100 may be permitted. You may retain a debit card and \ncheque card in respect of a current account which has no overdraft \nfacility and which is not overdrawn.<\/p>\n\n\n\n

Of course if you plan to offer proposals to your creditors for an \nIVA, you can keep your existing current account provided it is not \noverdrawn and provided you have no liabilities to your existing service \nprovider on other accounts or credit cards. If you do, you will be \nadvised by your IP to close your existing current account and to open a \nnew one with a service provider with whom you have no liabilities. You \nwill provide your employer with new instructions as to where your wages \nor salary is to be paid. You will cancel all existing direct debit \nmandates and standing orders and provide new instructions to your new \ncurrent account provider. You will set up new direct debit mandates for \nonly essential payments such as your mortgage, car HP and utilities. You\n will cease making payments on your unsecured debts. The timing of these\n activities is important and it probably should be done well in advance \nof the circulation of your IVA proposals. Ideally you will now have a \nnew clean current account with no overdraft, taken out from a service \nprovider with whom you have no other liabilities. Remember, some \ncreditors have associate companies.<\/p>\n\n\n\n

Your IP will be able to suggest alternative service providers who are\n not associated with your existing current account provider. Indeed even\n if you are not insolvent now but fear that you may become so some time \nin the future, you might consider opening and maintaining a clean \ncurrent account now, given the difficulty in doing so when your credit \nfile begins to be impaired.<\/p>\n","protected":false},"excerpt":{"rendered":"

Most people maintain a current account into which their wages or salaries are often paid by their employer via BACS or by other such means.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-2853","post","type-post","status-publish","format-standard","hentry","category-iva-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/2853","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=2853"}],"version-history":[{"count":2,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/2853\/revisions"}],"predecessor-version":[{"id":2876,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/2853\/revisions\/2876"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=2853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=2853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=2853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}