Bank Accounts IVA

An Individual Voluntary Arrangement (IVA) requires you to change your bank accounts, such that all of your unsecured debts, inclusive of small overdrafts, could be included in the agreement.

A new bank can provide you with a running bank account for your daily requirements in an IVA.
Not changing your bank accounts may disrupt your IVA payments if the bank freezes your funds against outstanding accounts held by them. Therefore, it is important to change bank accounts even if the IVA applicant does not have an overdraft.

In those situations where the person cannot continue to make repayments, the bank will continue to electronically take funds out of his account regardless of whether the account has sufficient funds or not, which will further create overdrafts.

A person with such an unauthorized overdraft will only see his costs rising up rapidly. This indicates the necessity to pass all your current account details to your Insolvency Practitioner and also to be included in the IVA, and when a new is opened, the details must be shared with them.

Further, the new bank account for your IVA should only be opened with a creditor with whom you do not have any prior debts.

For some, the change of bank accounts for an IVA may apparently become a tedious job. This is because with time people often become loyal to their bank and start building relationships.

The thought of changing bank accounts itself does not come across very welcoming to them. Nevertheless, it is imperative to change bank accounts so that IVA payments are not affected.

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