DMP or IVA how did you choose

Jon81 · 24 February 2015 at 3:38PM

I'm currently getting help with my finances from StepChange and I just wondered how other forum members came to the decision between an IVA or a DMP, I'm being recommended for an IVA but know that the final decision is mine.

Any pointers or considerations you had in a similar circumstances would be welcome if you are happy to share

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glentoran99 · 24 February 2015 at 3:42PM

I chose DMP as it was a similar timeframe to an IVA, an IVA would have also included my partners finances in the calculations the DMP didnt

I was also able to leave my overdraft out of it as i didnt want the hassle of changing banks.

Jon81 · 24 February 2015 at 3:48PM

Thanks, my concern with a dmp is that the term is looking to be 20 years although I'd hope and expect it to be over sooner. Interesting what you say about partners income and Iva I thought that wouldn't come into it?

glentoran99 · 24 February 2015 at 3:52PM

Jon81 wrote: »

Thanks, my concern with a dmp is that the term is looking to be 20 years although I'd hope and expect it to be over sooner. Interesting what you say about partners income and Iva I thought that wouldn't come into it?

Thats what i was told, that they would look at all the household income and expenditure and decide from that how much I would have to pay, which would have been a lot more than on the DMP.

Jon81 · 24 February 2015 at 3:54PM

glentoran99 wrote: »

Thats what i was told, that they would look at all the household income and expenditure and decide from that how much I would have to pay, which would have been a lot more than on the DMP.

Thanks for the heads up on that, I didn't realise that would be the case unfortunately

Puzzcat · 24 February 2015 at 7:39PM

I didn't even consider an IVA, I believe that it is a much more formal arrangement than a dmp. My dmp is now 16 months in and is expected to run until 2022.. but I do hope to bring the date a little closer.

For more dmp info do try and read some of the dmp mutual support thread as there is loads of information available.

Puzz. x

glentoran99 · 24 February 2015 at 8:08PM

Puzzcat wrote: »

I didn't even consider an IVA, I believe that it is a much more formal arrangement than a dmp. My dmp is now 16 months in and is expected to run until 2022.. but I do hope to bring the date a little closer.

For more dmp info do try and read some of the dmp mutual support thread as there is loads of information available.

Puzz. x

it is but only lasts 5 years

sourcrates · 24 February 2015 at 8:21PM

Depends how much you owe, and how much you can afford every month, 20 years on a DMP is just ludicrous, an IVA lasts a max of 6 years, normally it's 5, your partners income is inc, but you just manipulate your outgoings to take account of this.

You also have legal protection from any further action by your creditors, in a DMP you do not, they could, in theory, take you to court or bankrupt you at any time, should they wish to.

I started off on a DMP but with 54k of debt to shift, it was going to take forever, so went IVA instead, mine lasted 6 years as I was not, at the time, a property owner, so had to go an extra year.

To be honest, if I were going through that again now, I would take the easy option of Bankrupcy and have it over and done with in less than two years, but that's just me.

dancingfairy · 24 February 2015 at 8:43PM

Generally IVA are suitable for those where dmps would last a long time (over 6 years) and where bankruptcy isn't a sensible option due to assets such as a car or house.
I believe the debtcamel website compares a dmp to an IVA for the pros and cons.
Do bear in mind that IVAs are legally binding whereas dmps are informal agreements between yourself and your creditors (sometimes with the help of a third party). It's not necessarily a bad thing though as it's binding on both sides. Do make sure you read up on it all though before taking the plunge (or not).
df

dancingfairy · 24 February 2015 at 8:48PM

Generally I'm not a massive fan of IVAs as they have been missold to a lot of people as private companies make money out of them.
One of the main issues I have with IVAs is that you have to pretty much commit to making the payments for 5 years and that if you don't you frankly are back where you started and would probably be facing bankrutpcy.
If you went bankrupt the debts would be wiped immediately and you would only need to pay into the bankruptcy for a few years (I can't remember if it's 2 or 3).
Is there a particular reason to favour an IVA over say bankruptcy? Do you have a lot of equity in your house?
Based on the length of time for a dmp I'd say the most realistic options would be an IVA or bankruptcy.
It also depends on your career of course and whether any form of insolvency would cause issues. If so then you might want to go for a dmp.
df

melysion · 24 February 2015 at 9:05PM

IVA isn't even remotely an option for me as I would lose my job. Many people have found difficulties getting work (and not just in the finance sector - I am in publishing) after a IVA.

DMP or IVA how did you choose

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