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Who to go with 4 IVA cccs or payplan?

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Hi,

Need some advice from the many as good as experts on here. Done the online debt remedy with cccs and thy have recommended a low start dmp or iva. After lookin at all options would prefer to do iva if i get accepted.

However got a couple of wories/queries firstly who to go with cccs or payplan. As noticed on cccs debt remedy if i changed the figures slightly then iva not recommended. I have approx £350 surplus each month and 39,000 debt, but in true figures if i am realisitc I only have £250 surplus but cant change this on remedy or thy wont recommend iva.

Are payplan more leneant? Someone told me only need £150 surplus each month for iva is this true?

Please advise confused and have been for weeks but getting frustrated now.

Thankyou
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Comments

  • Useless_with_wonga
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    Hi,
    Firstly are you aware that with an IVA you will be expected to release any equity you may have in your home in year 4? This may not be an issue if you are in negative equity but in such cases you will be expected to pay a further 12 months into the IVA thus making it the term 6 Years.
    Sorry if you are already aware of this or if it does not apply because you live in rented just that a lot of folks don't seem to realise that this is the case.
    From my point of view all this is doing in reality is turning unsecured debt into secured but some folks are happy with that arrangement and if it suits your circumstances then that's fine as long as you realise and accept that is what is expected to happen.
    As for CCCS V's Payplan i doubt there will be anything in it worthy of worry both will follow the same or similar procedures.
    As for figures you can only offer what you can offer it's then up to CCCS/Payplan to put forward your proposal and then i'm afraid it's a game of wait and see what happens at the creditors meeting.
    Having said that both CCCS and Payplan will be well clued up as to the chances of your IVA proposal succeding. From experience they won't go to the trouble of all the work if it is unlikely to be accepted. They will offer other advice/solutions so all would not be lost.
    I think you need to speak to them in person and discuss it with them they will give you an early indication if an IVA is possible or suitable for your situation.
    It's a bit of a lottery really a lot depends on who your creditors are. Some won't entertain IVA's at all and if they own more than 25% of your total debt even if you owe more to other creditor/s they can block the IVA at the creditors meeting by just voting "No" and as such you won't acheive a 75% "yes" even if the other creditors agree to your IVA proposal.
    On the other hand the benefits of an IVA to your creditors over bankruptcy are obvious but sometimes they seem to cut off their noses to spite their faces.
    Sorry to sound negative it could of course all go very smoothly. I suspect it's the time issue for you i.e. IVA is over and done with quicker than a DMP i felt the same initially until i studied this forum and with guidance from other people here i decided that a DMP was more appropriate for me despite it taking longer to resolve it is more flexible in terms of payments and living allowances and my house is not involved in the equation.
    That said lot's of folks have had success on IVA's and are pleased they took that route.
  • the_colonel_4
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    Hi I am sick and tired of hearing about cccs and payplan. Cccs is merely a soft debt collector for the finance houses ,they get a percentage of all they distribute, if you look at their accounts on companies house they have in excess of £4.3 MILLION in reserves SOME CHARITY !!! Payplan are the same but are also a conduit through which lucrative IVAs flow to their sister company.
    The most important thing is that whoever you contact for advice explains ALL options to you so that you can make an informed choice. If their advice is biased towards an IVA then the chances are that is where their income flow is generated from and it is not neccesarily the right option for you.
  • Dr_Hook
    Dr_Hook Posts: 509 Forumite
    First Anniversary Combo Breaker
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    ...noticed on cccs debt remedy if i changed the figures slightly then iva not recommended. I have approx £350 surplus each month and 39,000 debt, but in true figures if i am realisitc I only have £250 surplus but cant change this on remedy or thy wont recommend iva.

    Be careful of tweaking figures to make sure you get an IVA - you're going to have to commit to this for 5 years and £100 per month is a big difference.

    As for an IVA with a surplus of £150 per month, it's certainly possible - especially if there is a change during the term of the VA such as HP payments ending which means the surplus significantly increases, but you need to remember that each IVA is (or at least should be) unique to the individual - the fact that Joe Bloggs only pays £150 per month doesn't mean that you will, or even should, it depends on your specific circumstances.

    Your best bet would be to get advice from a number of different organisations (the ones recommended at the top of the board would be a good place to start) and see if they come out with a common theme. An IVA isn't the wonder cure it's often portrayed to be, so approach companies with an open mind and don't try to steer them in any one direction - you'll only regret it later if you do.
    Proud to be dealing with my debts - DFW Nerd #491
  • MIVAA
    MIVAA Posts: 124 Forumite
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    Well said Colonel.

    CCCS and Payplan charge your creditors for you to do an IVA, just as every other Insolvency Practice does.

    Their IVA companies or partners are commercial businesses just as any other Insolvency Practice, and they charge Fees for the service they provide.

    Purple-Pear,

    You should not be even contemplating entering into an IVA if you do not have the necessary disposable income to support it.

    This is not because of the strictness of your IVA provider, but would be more accurately understood as you being unable to afford the minimum level of repayment that your creditors would accept from you to clear your debts through an IVA, once they have had to pay your IVAs costs.

    If you cannot afford to reach the minimum payments they would accept in an IVA there's no point in asking an IP to propose your IVA in the first place, which would create charges the IP would not be able to recoup from your creditors.

    They simply wouldn't waste their time.

    And that goes for Payplan too.

    You should try to establish the best route out of debt with the resources you have available to you, rather than trying to overstretch yourself.

    If you are absolutely convinced that an IVA is your preferred route, start asking yourself how you can either a) improve your income sufficiently to enable yourself to afford the payment, or b) ask how you can reduce your expenditure, and keep more of what you earn, and enable yourself to reach the minimum requirements that way.

    These, I'm afraid are the only real options you have.

    You should also have a free IVA consultation with a professional IVA adviser, as it may be there are other elements surrounding your circumstances that would help you afford your payments which you may be unaware of as yet.

    You would be best advised to do this in any event so that you can at least explore all your options in detail, and then make your decision.

    I hope this helps you,

    MIVAA
  • MIVAA
    MIVAA Posts: 124 Forumite
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    Hi Dr Hook,

    The amount of money you will be required to pay into your IVA will be specifically linked to your own personal circumstances. True, but there is a minimum IVA payment too which must be affordable to the debtor, which will be directly linked to your total unsecured debt level, and to whom you owe the debt.

    The combination of all these factors will establish whether or not your circumstances favour an IVA or not.

    That's why you should ask an IVA specialist, to help you establish:

    1. What your creditors would expect you to provide as a minimum in an IVA.
    2. What you can afford to repay into the IVA over the term of the IVA.
  • Dr_Hook
    Dr_Hook Posts: 509 Forumite
    First Anniversary Combo Breaker
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    MIVAA wrote: »
    Hi Dr Hook,

    The amount of money you will be required to pay into your IVA will be specifically linked to your own personal circumstances. True, but there is a minimum IVA payment too which must be affordable to the debtor, which will be directly linked to your total unsecured debt level, and to whom you owe the debt.

    But it shouldn't be held that a person is unsuitable for an IVA if they can't afford a surplus of (for example) £200 per month - it's possible to do asset-only IVAs: zero contributions and introduction of a lump sum (from equity or elsewhere), or to have low starting contributions which later increase. The two factors that the IP will consider is the overall return to creditors and how soon their fees will be paid. If that can be done with low contributions for the first 6 months, then an IVA may be viable.

    The BBA has been working with the IPA and others to remove the minimum dividend hurdles imposed by some creditors and consequently acceptance criteria for IVAs is not as stringent as it was 6-12 months ago. People should not be put off considering an IVA just because Northern Rock or HSBC are a creditor.

    As you say, the best advice is to speak to a professional.
    Proud to be dealing with my debts - DFW Nerd #491
  • MIVAA
    MIVAA Posts: 124 Forumite
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    The Lump Sum IVA, to which you refer, is a viable solution to a very very narrow margin of people.

    It is mostly made plausible through 3 party contributions rather than equity release, because a 3rd party's contribution would not form part of the debtors bankruptcy estate, whereas equity does.

    Most people will in truth be able, and therefore expected, to contribute a monthly amount into their IVA equal to, or higher than, the minimum dividend return that their set of creditors will demand.

    Any equity would be required 'as well as' the minimum dividend via monthly contributions, especially in this market, as equity in property is shrinking rather than growing.

    Creditors will not make allowance for the introduction of equity that might be available at the end of the fourth year, as a way of lifting the average IVA contribution, as it might not be there when the time comes to introduce it.

    Instead they will require the minimum IVA dividend threshold be reached by monthly contributions on their own, with the promise of any releasable equity, if it happens to be there at the appropriate time.

    It is accurate to say that Hire Purchase agreements can influence the average IVA contribution, as when the HP payments finish the money will be expected to be introduced into the arrangement for the remainder of the IVA.

    The BBA has been in discussions with the IPA over hurdle rates, but it is untrue to suggest the creditors criteria is not as stringent as it has been for the last 3 years or so, and the hurdle rates under discussion were, as far as I understand, the inflated minimum dividend by the likes of HSBC, which still haven't been relaxed.

    Northern Rock are still extremely inconsistent with their voting, with no apparent basic IVA policy in place.

    Challenges to the Northern Rocks stance are continually being made, but as yet there has been little, if any, changes.

    The same goes with HSBC and MBNA.

    But you are right, people whose circumstances suit applying for an IVA should still apply, and let their creditors decide on whether to accept their IVA or not.

    MIVAA
  • Dr_Hook
    Dr_Hook Posts: 509 Forumite
    First Anniversary Combo Breaker
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    MIVAA wrote: »
    It is mostly made plausible through 3 party contributions rather than equity release, because a 3rd party's contribution would not form part of the debtors bankruptcy estate, whereas equity does.

    True, but I was alluding to a short-term arrangement with equity introduced by way of sale, assuming the cost of rent meant that contributions post-sale were not possible.
    MIVAA wrote: »
    But you are right, people whose circumstances suit applying for an IVA should still apply, and let their creditors decide on whether to accept their IVA or not.

    That's really my point - people shouldn't be put off considering an IVA because they don't think they can afford a certain monthly payment or they've heard their majority creditor has strict voting criteria. Speak to an impartial professional (if such a thing exists :p) and see what they say.

    To get back OT: really it's a case of speaking to both payplan and cccs (and a couple of others) and going with the company which gives you the best impression - there's not a lot else to choose between them.
    Proud to be dealing with my debts - DFW Nerd #491
  • MIVAA
    MIVAA Posts: 124 Forumite
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    Excellent.

    Well said Dr Hook. ;)
  • purple-pear
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    Thats why I am asking what is acceptable as a payment? I have been told £150 per month is enough so if that is the case I would be ok with this or even more what I wanted advice on is how thy work this out?
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