IVA provider wants monthly payment before IVA agreed?

skintandscared_2

UWW's point is a very good one in that circumstances can change and you may have more money to put towards a DMP in the future, reducing the term. But things can go the other way too. 5 years is a long time and if you are on an IVA and find you can't manage, you cannot miss even one payment. If you do, your creditors can file for bankruptcy. You could have been paying a solicitor for a couple of years and still end up bankrupt. There is more leniency with a DMP and there is more chance of being able to reduce payments if you absolutely have to.

When I first started thinking about DMP/IVA I really wasn't sure which way to go. I spoke to a solicitor who set it all out for me. The solicitor's fee is set at the start, so if your creditors do agree to the plan you will have a certain amount to pay to them over the term of the IVA (my solicitor was going to charge £7k I think). Then you add on whatever percentage of debt your creditors have agreed to accept and divide it by 60 months. But he didn't tell me about the mortgage refinancing in year 4 (to pay as much of the rest of the debt off as possible) because I don't have a property. Even taking that into account, an IVA looked far more risky.

I suppose you have to weigh up all the possibilities and do what's best for you. If the mortgage refinancing in year 4 would still be better than going the term of a DMP then go for it. Best of luck whatever you decide.

Deep_In_Debt

If it's any consolation and just my penny's worth (would be two pennies worth, but I'm skint!), I was told it would take me just over 9 years to clear my debts on a dmp but since I started my dmp in January and with some hard work and determination, I've managed to reduce my dmp term to 5 years in a matter of 11 months or so.

DMp's are far more flexible and you pay all your debt back. Ok, your credit rating is trashed which ever way you choose to go. I just couldn't see the point of re-mortgaging my house in year 4, thus not actually clearing my debt but adding to it by way of a secured debt and putting my house at risk in the future.

Just my opinion though.

Good luck with whatever you choose.

dorisday

Having read this thread just want to say be very very careful with an IVA I went with one as advised by someone at national debt line. Meeting went well but I dihinkthe mnthy payment were set too high bu I wastold they woundnt take an less. anyhow it failed at end of 2 years and the cost was £4000 which all went to the insolvency company as charges. I wasnt made bankrupt but went on to deal with the creditors myself and am still paying every month but its what I can afford. Another thing I did get back in touch with national debt line and was told all files on me were lost and I shouldnt have been advised to go for an IVA. You do have to raise more money into 4/5 years of the IVA but of course thats impossible because its on your credit report - try getting another mortgage!!! impossible or at extremely high rates. Im so very very pleased mine failed. But angry about the £4000 that was taken as charges - non at all to the creditors.