Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Mum2emily
    • By Mum2emily 17th Apr 17, 5:17 PM
    • 5Posts
    • 0Thanks
    Mum2emily
    Confused over whether to do IVA or DMP
    • #1
    • 17th Apr 17, 5:17 PM
    Confused over whether to do IVA or DMP 17th Apr 17 at 5:17 PM
    Hi, newbie here and have spent the last couple of weeks incredibly confused as to whether to go for IVA or DMP. I have spoken to stepchange who have advised IVA but alternative DMP. I have debts totalling £28k and under IVA I would have to pay £293 a month for 5/6 years and there would be a restriction put on selling my house I have with my exhusband which is currently rented out and has no equity at present. Under DMP I would pay £253 a month for first 4 years then when my HP finishes pay £388 for a further 3 years (so 7 years in total). The thing that puts me off the IVA option is the house. I would not want to remortgage with my ex in the future-the plan is to sell this house in around 3/4 years (I would be happy to hand over any equity). I then think if I was on a DMP it wouldn't last much longer than IVA but I could keep any profit from house sale to maybe make settlement offers/pay more off my debt. I am just scared on DMP that my creditors won't freeze/lower interest and it will take much longer to pay and that they will pursue the debt. My creditors are Tesco, barclaycard and HSBC, currently I have not missed any payments and there are no arrears.

    Any help/advice from others on DMP would be greatly appreciated. I have all the paperwork for IVA and DMP just can't make a decision
Page 1
    • itsallabitmuch
    • By itsallabitmuch 17th Apr 17, 5:25 PM
    • 51 Posts
    • 80 Thanks
    itsallabitmuch
    • #2
    • 17th Apr 17, 5:25 PM
    • #2
    • 17th Apr 17, 5:25 PM
    Hey, and welcome

    I'm currently on a new (2 months old) DMP and I love it.

    I think it really is down to you, but I'm sure that there are many others much wiser than I who will advise you better than I could.

    Bear in mind that, as far as I'm aware, you could go ahead with the DMP and switch to an IVA at a later point if you needed to.

    All of my creditors froze my interest - there's no guarantee that yours will, but StepChange have a pretty good track record for achieving this.

    Hang fire some much wiser responses, and good luck! Let us know what you decide x
    • Mum2emily
    • By Mum2emily 17th Apr 17, 5:37 PM
    • 5 Posts
    • 0 Thanks
    Mum2emily
    • #3
    • 17th Apr 17, 5:37 PM
    • #3
    • 17th Apr 17, 5:37 PM
    Thank you for your reply. I am glad they have frozen interest and accepted it. I did think I could try the DMP route first but (this is going to sound very lazy!) I already now have all the paperwork for the IVA and had a 2hr appt on the phone completed beforehand-so I suppose it's just having to get all that paperwork again in 6 months time as there was quite a lot! I keep reading good and bad things about both after thinking I've made my mind up!
    • itsallabitmuch
    • By itsallabitmuch 17th Apr 17, 5:49 PM
    • 51 Posts
    • 80 Thanks
    itsallabitmuch
    • #4
    • 17th Apr 17, 5:49 PM
    • #4
    • 17th Apr 17, 5:49 PM
    I know what you mean!

    Our mortgage is actually only in my husband's name, but I didn't want to go down the IVA route myself as it felt wrong somehow. It really is down to personal preference, though, and I agree that it's really hard to make the decision!

    I still find myself wondering whether I should apply for a DRO instead of carrying on with the DMP, but I'm going to see how things stand in August, as we will be having £100 per month freed up at the end of July.

    I will say, though, that in terms of the DMP, you could still be required to pay a lump sum if you come into any money (like from a house sale). I've got a court case coming up - the judge has said it has to be heard by the end of August this year, or he'll enter a judgement against the other party regardless (the other party has been stalling for 6 years!). I'm not counting on receiving any money from this (although the evidence says I certainly should be!), but I did tell StepChange about it. They said that if I do have a judgment entered in my favour, then that money will be expected to go towards the DMP in addition to my monthly payments.

    I'm not sure if that helps you to reach a decision?

    Is either a DMP or IVA your only solution? Are you unable to continue paying your monthly repayments? It may help if you do an SoA - the link is http://www.stoozing.com/calculator/soa.php. You can format is for MSE and post it in here if that helps you
    • sourcrates
    • By sourcrates 17th Apr 17, 6:29 PM
    • 10,579 Posts
    • 10,354 Thanks
    sourcrates
    • #5
    • 17th Apr 17, 6:29 PM
    • #5
    • 17th Apr 17, 6:29 PM
    Hi,

    In an IVA, any profits from a house sale would have to be paid into your IVA for the benefit of your creditors.

    In a DMP, you are correct in thinking you can keep it all, no one else has a claim on your money but you.

    IVA's give you legal protection from your creditors, DMP's do not, in your situation I would choose DMP as it's more flexible which matches your current circumstances, in a DMP most creditors will stop interest, those who won't, you just don't pay until they sell on your debt, once sold on, no further interest or charges can be added, so you simply add that debt to your arrangement.

    When you come to sell the house, your share of the profits can then be used to get the best settlement deals available.

    I must say, if you have not even yet missed a payment, you need to go about this in the right way, if you choose DMP, you should stop paying your creditors straight away, ideally follow this course of action for about 6 months, this will do two things, (hopefully) they will default you quicker (avoids AP markers on your credit file) and it will also give you time to save up an emergency fund, which, trust me, you will need.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • Mum2emily
    • By Mum2emily 17th Apr 17, 8:07 PM
    • 5 Posts
    • 0 Thanks
    Mum2emily
    • #6
    • 17th Apr 17, 8:07 PM
    • #6
    • 17th Apr 17, 8:07 PM
    Thank you both for your help. I had a look on debt camel and seen something about a secured loan against a property that IVA can now do in your 5th year if you can't remortgage which has made me a bit scared to go down that route as want to cut financial ties with my ex husband as soon as I can rather than extend them. I haven't missed payments but I am now kind of robbing peter to pay paul and can't see a way out of my debt. I definitely don't have any issues about paying money I recieve off my debt-it's just the legallity of this house tie versus the possibilty of still being chased by debt/accruing debt through further interest or charges.
    • fatbelly
    • By fatbelly 17th Apr 17, 8:31 PM
    • 10,680 Posts
    • 7,973 Thanks
    fatbelly
    • #7
    • 17th Apr 17, 8:31 PM
    • #7
    • 17th Apr 17, 8:31 PM
    Thank you both for your help. I had a look on debt camel and seen something about a secured loan against a property that IVA can now do in your 5th year if you can't remortgage which has made me a bit scared to go down that route as want to cut financial ties with my ex husband as soon as I can rather than extend them. I haven't missed payments but I am now kind of robbing peter to pay paul and can't see a way out of my debt. I definitely don't have any issues about paying money I recieve off my debt-it's just the legallity of this house tie versus the possibilty of still being chased by debt/accruing debt through further interest or charges.
    Originally posted by Mum2emily
    debt camel is a good source of info.

    I agree those seem to be your choices but on the figures given there is not much to suggest an iva as being the better strategy.

    I'd follow sourcrates' advice and start looking at a dmp.
  • National Debtline
    • #8
    • 18th Apr 17, 10:47 AM
    • #8
    • 18th Apr 17, 10:47 AM
    Hi

    I agree with the others here that itís best to start off with a DMP and see how it goes. Potentially it may only take a year longer than an IVA, and possibly even less depending on how the house sale and settlement offers work out.

    If you canít realistically afford your debt payments at the moment itís best to cancel the payments and send this Ďhold actioní letter to you creditors.

    www.nationaldebtline.org/EW/sampleletters/Pages/Hold-action-on-your-account-%28sole-name%29.aspx#

    James
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • Mum2emily
    • By Mum2emily 19th Apr 17, 4:30 PM
    • 5 Posts
    • 0 Thanks
    Mum2emily
    • #9
    • 19th Apr 17, 4:30 PM
    • #9
    • 19th Apr 17, 4:30 PM
    Thanks everyone. I will go down the DMP route and hope for the best. I feel sick over cancelling my Direct Debits and the letters/phonecalls that will follow but will try not to worry!
    • sourcrates
    • By sourcrates 19th Apr 17, 4:45 PM
    • 10,579 Posts
    • 10,354 Thanks
    sourcrates
    Thanks everyone. I will go down the DMP route and hope for the best. I feel sick over cancelling my Direct Debits and the letters/phonecalls that will follow but will try not to worry!
    Originally posted by Mum2emily
    Don't let it worry you.

    You are not the first, you will not be the last, creditors are well used to this happenening, that's why they spend millions on dedicated depts to deal with people in financial difficulties.

    Any calls, you simply say you are getting help from stepchange and will be in touch shortly, good bye.

    If it helps, you can write and inform your creditors of your situation, you will get an automatic 30 days where your accounts are put on hold.

    These things happen all the time, take it from one whose been insolvent twice, trust me, nothing bad will happen, don't worry.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • Mum2emily
    • By Mum2emily 19th Apr 17, 4:57 PM
    • 5 Posts
    • 0 Thanks
    Mum2emily
    Thank you, I think I will use the templates from above and send them same time as cancelling my payments. I just hope my creditors are understanding-it seems from the DMP support thread most are so fingers crossed.
    • BrightLights14
    • By BrightLights14 19th Apr 17, 4:58 PM
    • 47 Posts
    • 30 Thanks
    BrightLights14
    Good luck Mum2emily - and please don't worry. I wrote to all my creditors once I'd decided on the DMP route to tell them what was happening, and I don't remember receiving a single call. It definitely won't be as bad as you're expecting.

    Well done on taking control! x
    and here you are living, despite it all
    - Rupi Kaur

    LBM August 2013 - debt: £27,181
    April 2017 - debt: £11,595
    DFD - September 2018
    • sourcrates
    • By sourcrates 19th Apr 17, 5:18 PM
    • 10,579 Posts
    • 10,354 Thanks
    sourcrates
    Thank you, I just hope my creditors are understanding-it seems from the DMP support thread most are so fingers crossed.
    Originally posted by Mum2emily
    You don't have to have understanding creditors, it's not there place to understand your situation or not, they make business decisions, they have procedures to follow for people who can't pay, they will just swing that procedure into action, that's it.

    Of course it helps if you write and explain yourself, ask for interest and charges to be stopped etc.

    You can't think of your creditors as you would a friend or family member, they are a business, and will make business decisions, but they must treat you fairly.

    As I said, it's a well worn path.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • fatbelly
    • By fatbelly 19th Apr 17, 8:39 PM
    • 10,680 Posts
    • 7,973 Thanks
    fatbelly
    You don't have to have understanding creditors, it's not there place to understand your situation or not, they make business decisions, they have procedures to follow for people who can't pay, they will just swing that procedure into action, that's it.

    Of course it helps if you write and explain yourself, ask for interest and charges to be stopped etc.

    You can't think of your creditors as you would a friend or family member, they are a business, and will make business decisions, but they must treat you fairly.

    As I said, it's a well worn path.
    Originally posted by sourcrates
    Exactly right.

    And those who are slow to fall into line, you nag them until they do.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,924Posts Today

6,720Users online

Martin's Twitter