IVA vs DMP advice

bottom_of_the_class

I apologise now if this has been posted before, but I have tried searching through the hundreds of posts and not really been able to find a situation identical to ours.

We have contacted the CCCS having completed a SOA and have been advised to either do an IVA or DMP - IVA was the first course of action recommended though.

We have unsecured debts of nearly £70k, 2 mortgages and a negative equity situation.

Things are starting to get bad at home now my husband seems to think that an IVA is a magic wand that is going to make everything instantly ok but I am not too sure and really would prefer to do a DMP.

At present even though it is crippling us we have no arrears on anything and never have had and even though the CCCS say that it would take us 13.5 years to clear everything with a DMP that is not taking into consideration wage increases (we are both very lucky to have very secure well paid jobs) and we have an insurance policy maturing in 2.5 years time for £20k, so the reality is that it wouldn't really take 13+ years although admittedly it might take longer than an IVA would.

If anyone would be kind enough to share their knowledge and or experiences regarding the best course of action to take I would be extremely grateful, as I will admit to having eyes that now look as though I've been boxing due to the amount of leakage that's been going on recently.

Huge thanks

rubydoiwannabee

bottom_of_the_class wrote: »

I apologise now if this has been posted before, but I have tried searching through the hundreds of posts and not really been able to find a situation identical to ours.

We have contacted the CCCS having completed a SOA and have been advised to either do an IVA or DMP - IVA was the first course of action recommended though.

We have unsecured debts of nearly £70k, 2 mortgages and a negative equity situation.

Things are starting to get bad at home now my husband seems to think that an IVA is a magic wand that is going to make everything instantly ok but I am not too sure and really would prefer to do a DMP.

At present even though it is crippling us we have no arrears on anything and never have had and even though the CCCS say that it would take us 13.5 years to clear everything with a DMP that is not taking into consideration wage increases (we are both very lucky to have very secure well paid jobs) and we have an insurance policy maturing in 2.5 years time for £20k, so the reality is that it wouldn't really take 13+ years although admittedly it might take longer than an IVA would.

If anyone would be kind enough to share their knowledge and or experiences regarding the best course of action to take I would be extremely grateful, as I will admit to having eyes that now look as though I've been boxing due to the amount of leakage that's been going on recently.

Huge thanks

Hi there and welcome to the boards,
You will get lots and lots of excellent advice, support and guidance from these boards and I am sure in time you will be glad you have typed this message tonight.

Personally I don't have experience of IVA, but have read here that they are very restrictive and do not allow for your circumstances changing. Whereas a DMP is reviewed regularly and can be altered, either increased or decreased should your circumstances dictate. So in my opinion a DMP, would be the better route.

Others willl no doubt be able to offer more detail.

Best of luck and keep posting here.

(It is the best thing I have ever done in relation to our debt)
x

tigerfeet2006

Have a read of Martins excellent article on IVA's to give you some more infomation.

http://www.moneysavingexpert.com/loans/pdf-iva-guide.pdf

Also give National Debtline a ring and go through your options with them as well. It is always good to get 2nd opinions

There will be more people around in the morning to give you advice but meanwhile have a read of the DMP support thread
http://forums.moneysavingexpert.com/showthread.html?t=977633&highlight=dmp+support

RichOneday_2

The fundamental difference is that a DMP pays your debts back in full whereas the IVA pays a percentage and is usually for a fixed term of 5 years.

IVAs have been mis-sold on a grand scale in the last few years and have been responsible for dragging people's problems out longer than necessary.

In your situation I would wait for your policy to mature and then invoke what is known as a '1-day IVA'.

This would involve going into and out of the IVA on the same day rather than a 5 year plan. The principle is the same in that a lot of IVAs might pay back 30% of unsecured debt over 5 years, so if a similar amount can be paid in a lump sum it accelerates the process. By doing this you would be debt free in 2.5 years except your mortgages.

So, maybe a DMP with as low payments as possible for 2.5 years and then a '1-day IVA' may be a decent course of action. Obviously take advice though.

Merlot

welcome to the board, I too agree you should read Martins advice on IVA, they are not for everyone, actually very few are suited to an IVA. (its one step away from bankruptcy).

Personally without seeing an SOA (incomings and outgoings) and a breakdown of your debts, I would say DMP too.

There is no magic wand I'm sorry to tell your husband, repaying debts can be a slow difficult task, but with the help and support from the peeps on here and one of the debt charities, you can do this.

Merlot.x.

rubydoiwannabee

RichOneday wrote: »

The fundamental difference is that a DMP pays your debts back in full whereas the IVA pays a percentage and is usually for a fixed term of 5 years.

IVAs have been mis-sold on a grand scale in the last few years and have been responsible for dragging people's problems out longer than necessary.

In your situation I would wait for your policy to mature and then invoke what is known as a '1-day IVA'.

This would involve going into and out of the IVA on the same day rather than a 5 year plan. The principle is the same in that a lot of IVAs might pay back 30% of unsecured debt over 5 years, so if a similar amount can be paid in a lump sum it accelerates the process. By doing this you would be debt free in 2.5 years except your mortgages.

So, maybe a DMP with as low payments as possible for 2.5 years and then a '1-day IVA' may be a decent course of action. Obviously take advice though.

Is this effectively full and final settlements?

Merlot

Ruby, I was going to ask the same. I haven't heard of 1 day IVA.

RichOneday_2

It is full and final settlement!

Usually used where there is equity in a property and an 'IVA-friendly' lender is used to free the lump sum. But any lump sum can be used, the creditors don't particularly care where the money has come from.

rubydoiwannabee

RichOneday wrote: »

It is full and final settlement!

Usually used where there is equity in a property and an 'IVA-friendly' lender is used to free the lump sum. But any lump sum can be used, the creditors don't particularly care where the money has come from.

Thanks for the explanation, I hadn't heard it referred to as a 1 day iva before. Useful to know.

rubydoiwannabee

Merlot wrote: »

Ruby, I was going to ask the same. I haven't heard of 1 day IVA.

Hi Merlot,
Me neither!!!
I learn something new on this site everyday.

I hope you are well.

Merlot

rubydoiwannabee wrote: »

Hi Merlot,
Me neither!!!
I learn something new on this site everyday.

I hope you are well.

I'm very well thanks Ruby, I'm so pleased to read your progress Ruby, you are doing a fab job in repaying your debts.

Merlot.x.