Debt Questions forum. General questions on debt issues.

Moderators: TalbotWoods, JaneClack

By watavIdun
#6864 Hi all

Haven't posted for a while but have kept a very keen eye on the site.
My IVA seems to have taken an age to get going, saw IP in January and I now have a date for creds meeting - late next month.

I wanted to ask you this.....I have a credit card which has a zero balance.....yes...ZERO! I have never ever used it. I got it some time ago to transfer balances (that old chestnut) anyway the rate I got wasn't worth it in the end so I didn't bother.

My point is this - although I can not take any credit while in the IVA (if accepted) suppose I pay some money to the card company before I use the card? a payment on account if you like. Sounds a bit daft but if I then use the card I haven't taken credit right? and at the same time I must be creating a credit history?? See where I am coming from...

Anyone done anything simillar?

Cheers
ByVanessa
#6865 Nice idea but it doesn't quite add up as 1) you could be seen to be giving preferential treatment to a creditor and jeopardising the remainder of your IVA arrangements 2) you would have to keep the account in credit throughout the IVA and I doubt that you will have that sort of disposable income 3) the 'bad' credit rating effected by the IVA will supersede the 'good' credit rating of the card.
By watavIdun
#6884 Hi Vanessa

Thanks for your reply but....

1) how would they be classed as a creditor if the account was always pre-paid?
2) I was thinking that if I put credit on the card to the value of my monthly petrol, say, and then use the card to fill up instead of cash the budget wouldn't be a problem.
3) After the IVA has been removed in 6 years (or so) I will still have "a" credit rating because of the card. Reading other posts on here it seems it is almost as bad to have no credit rating as it is to have a bad one!

Anyway it was just an idea, as a matter of fact I NEVER want credit again - the only reason to build up my rating was for future mortgages or the suchlike.

Cheers
ByDavidc
#6885
watavIdun wrote:Hi Vanessa

Thanks for your reply but....

1) how would they be classed as a creditor if the account was always pre-paid?
2) I was thinking that if I put credit on the card to the value of my monthly petrol, say, and then use the card to fill up instead of cash the budget wouldn't be a problem.
3) After the IVA has been removed in 6 years (or so) I will still have "a" credit rating because of the card. Reading other posts on here it seems it is almost as bad to have no credit rating as it is to have a bad one!

Anyway it was just an idea, as a matter of fact I NEVER want credit again - the only reason to build up my rating was for future mortgages or the suchlike.

Cheers


I do see your point but let me tell you what the risks are....
You will never be able to guarantee that the card will be accepted as they may run a random credit check at any time on you for marketing purposes and then close the account. So remember to always have the cash in your wallet as well to pay for that tank of petrol.
One of your creditors may for some reason pick up on this activity through the insite system run by the CRA's. More than likely this would result in your IVA failing and you being forced into bankruptcy.
The only advantage will be after 6 years when the detrimental info drops off your file and from that point the positive info from this card will add to your record.
In the end it will be up to you to decide what to do but I assume that the fact that you have opted for an IVA as oposed to bankruptcv is because you are protecting an asset. Are you willing to gamble this asset on the chance of this slipping through the system unnoticed for the period of your IVA ?
David
By watavIdun
#6887 Hi David

Well if you put it like that the answer would be NO!
Thanks for the info.

I will hang onto the card which I guess may or may not be withdrawn during the IVA. If I have it at the end I guess I could then start to build up my rating (ensuring that it is paid off every month - not going there again).

If I ever come to apply for a new mortgage (my IVA doesn't include a clause to remortgage but just to pay further installments as the equity is quite small) I guess I will have to declare the IVA anyway? Regardless of how long it may have been finished?

Cheers
User avatar
By JaneClack
#6888 Yes, but the longer out of your IVA the better. People can remortgage in IVAs anyway but with subprime lenders - many have to to get round the equity clause. But payment history with the mortgage will help with the CR report anyway so that part you do not really have to worry about!
By watavIdun
#6889 Thanks Sarah

You have just reminded me of something else I wanted to run by you guys....

my current mortgage is one of those flexible tracker type. This means I can make under/over (ha! ha!) payments, take payment breaks etc. etc.

Now, as there is (currently) noting in the IVA to suggest I will need to remortgage or that the creditors have an interest in the property - is there anything to stop me taking a payment break (or simillar) on the mortgage? We are talking about £1400 a month here so it would certainly help with the budget! By the way this would not result in an increase of mortgage payments.

What do you think?
ByDavidc
#6891
watavIdun wrote:Hi David

Well if you put it like that the answer would be NO!
Thanks for the info.

I will hang onto the card which I guess may or may not be withdrawn during the IVA. If I have it at the end I guess I could then start to build up my rating (ensuring that it is paid off every month - not going there again).

If I ever come to apply for a new mortgage (my IVA doesn't include a clause to remortgage but just to pay further installments as the equity is quite small) I guess I will have to declare the IVA anyway? Regardless of how long it may have been finished?

Cheers


A word from the wise.
Pop one on it every three months or so to keep it live. If it becomes dormant they may look at it and close it. :wink:
David