IVA Your choice or theirs?

marklunn3602

Morning all

I'm still trying to pull everything together and we have an appointment with CCCS next Thursday. We spoke to Payplan on Sinday and they went straight to a DMP and they really discuss it with us!

At the moment I'm in favour of a DMP but I've just found out the debt is now 28k not 22k as I thought, and it seems with what we have available that it will take many years to pay that off. I'm geussing about 8-9yrs.
So I'm starting to think about an IVA again. I know the implications with the credit rating but I dont care to be honest as I personally have done without credit through my own choice for two years. The only thing that worrys me about and IVA is the effect on future mortage applications as its up for renewal next year.

So my questions are this, 1) Whose choice is it to go for an IVA? Ours or the DMC?

2) On either a DMP or IVA are you allowed to have any savings? The thought of having nothing saved or even not having a small holiday for at least 5yrs fills me with dread!

Mark

Deep_In_Debt

Hi
I think it's your choice to go for an IVA but creditors will have to vote to accept it.

I think you are allowed to have savings whilst on a DMP. However, I am not sure about an IVA as you are stripped back to the bare minimum living expenses. Remember a lot can happen in 5 years and if you miss a few payments on it, it can result in bankruptcy, but a dmp is more flexible; if you lose your job for example, then you can make token payments until you are in work again, whereas I'm not sure an IVA is that flexible.

I'm on a dmp with CCCS and when I started it in January this year, I was told it would take me 9 years to clear my debts. I've managed to reduce this term to 6 years in a few months.

Do think very carefully before going down the IVA route - I'm just so glad I didn't do it!

Good luck.

fermi

marklunn3602 wrote: »

So my questions are this, 1) Whose choice is it to go for an IVA? Ours or the DMC?

Always your choice. But you should only go ahead with one if advised that it is the best option by some impartial like CCCS.

Martin did a quite simple but honest guide to IVAs here: Guide to IVAs - Are they worth it?

Budgeting is normally very tight on an IVA, so build-up up a meaningful amount of savings would not really be possible. You have to remember that an IVA is a legal form of insolvency, so you are expected to put all spare income towards your debts.

As already pointed out, if an IVA fails it can result in bankruptcy depending on the terms of the agreement.

marklunn3602

DID

You say that if you lose your job on a DMP you can make token payments.
Is this also the case if the wife falls pregnant and is on maternity leave?

Mark

RAS

marklunn3602 wrote: »

DID

Is this also the case if the wife falls pregnant and is on maternity leave?

Mark

Hi this is precisely why a DMP is safer. You might not be one token payment but you could well be able to do reduced payments if she was on maternity leave and then remain on lower payments if she did not return ffull-time or had high childcare costs. On an IVA you would struggle and we see loads of people whose IVAs have failed either because of job loss, maternity leave, ill-health or relationship break-down.

In these situations the only out can be bankruptcy and you lose all the money paid into the IVA as well as the fees. So you might as well have gone Bk in the first instance.