Dmp Or Iva ......... Help Confused!!!

louWILL_3

Hi All

Last September my debts just started become a nightmare £38k so I contacted PAYPLAN who at the time were very helpful. I filled all the relevant forms out with them and was advised that a DMP would probably be the best solution for me.

At the time I had quite a new credit card so I had to make 3 priority payments on it before the DMP could be put in place and PAYPLAN could set the wheels in motion. In the meantime I was making some sort of payment to all my creditors. The 3 months past and in January '09 I received a call from PAYPLAN asking if I had made the 3 priority payments, which I had done. A few things had changed with regards to my budget my wages had gone up, but so had everything else!!!!!!!!!!

Yesterday I finally managed to get intouch with my advisor at PAYPLAN she informed me that after paying everything I needed to pay mortgage, utilities etc etc. I would be left with just over £300 to go towards paying my debts as it would take me just over 15yrs to pay them all back she thought it would be best for me to go down the route of an IVA!!!!!!

The other reason she gave for this was that one of my debts was with Northern Rock and they have a nasty habit of applying to the Court to make the debt a secured debt rather than an unsecured debt. Due to the state of the housing market I'm possily in negative equity or may have about £2k equity. When I asked her what happens if the creditors vote against this she said then we would try DMP. Then on the next breath she in a roundabout way tried to sell me insurance home/car and was sending me details

I'm really worried now because I thought an IVA was the next one down to being Bankrupt which I can't end up because of job. At this moment in time yes I have £300 to go towards my debts but what happens in the future when the cost of everything carries on rising???????

All advice would e greatfully received

Deep_In_Debt

Hi
Try phoning CCCS and CAB. Both are charities and will advise in your interests. Payplan are not a charity. I had a bad experience with them as they tried to hard sell me an IVA when it was not suitable for me. Just my opinion though.

I'm on a dmp with CCCS and originally I was told it would take me 9 years to clear my debts but have since managed to reduce that term to about 6 years in the year that I've been with CCCS.

Like you, I had a job that would have been affected by BR (I worked in Financial Services in a job regulated by the FSA) so I was loathe to take the IVA route for the same reason. I'm glad I didn't as I got made redundant in August and may have been facing BR anyway. Although, I have since secured another job - a lot can happen in 5 years. In my opinion, dmps are a lot more flexible.

Sorry, rant over!

Good luck.

louWILL_3

My gut feeling is saying defo dont go with the IVA and after reading some of the other posts on here I'm thinking it maybe a good idea to ring CCCs

rainman31

I contacted both payplan and the CCCS

The CCCS were far more helpful IMO

BlueAngelCV

What is the position in terms of your credit rating?
From looking into payplan in appears that a DMP doesn't affect it in the same was a an IVA would. Is that correct?
I'm paying off most of my debts but am usually about £100 short each month. I'd be interested in entering into a DMP to make things more manageable but not if it's going to have a negative effect on my credit rating.

fatbelly

louWILL wrote: »

The other reason she gave for this was that one of my debts was with Northern Rock and they have a nasty habit of applying to the Court to make the debt a secured debt rather than an unsecured debt. Due to the state of the housing market I'm possily in negative equity or may have about £2k equity. When I asked her what happens if the creditors vote against this she said then we would try DMP. Then on the next breath she in a roundabout way tried to sell me insurance home/car and was sending me details

I'm really worried now because I thought an IVA was the next one down to being Bankrupt which I can't end up because of job. At this moment in time yes I have £300 to go towards my debts but what happens in the future when the cost of everything carries on rising???????

All advice would e greatfully received

I am a bit uncomfortable with this because

1. Payplan have been known to push IVAs and do pick up a substantial fee if they get to set one up.
2. Northern Rock do take the CCJ/Charging Order route on a lot of debts. But that's because they (mis)sold a lot of 'together' mortgages where there was an unsecured part and a secured part - they're now trying to secure both parts wherever they can. If it's a normal unsecured loan, they're not more likely to take court action than any other creditor.
3. Trying to sell you insurance does not sound very encouraging either.
4. It's true that 38k in an IVA might result in a 5-year £300 per month plan, legally binding, no equity in the property, that does look attractive. But if they can get interest frozen, then a £300 per month dmp pays the whole lot in 10 and a bit years, doesn't it? Where does 15 years come from?

P.S. credit rating will be shot either way!

louWILL_3

They both mess up your credit rating!!!!! If your £100 short every month to pay your debts then you'll possibly end up in my position and in the end your credit rating will be rubbish anyway. I'm still trying to get my head around both the DMP and the IVA lots of pro/cons so I'm probably not the best person to give advice

louWILL_3

Fatbelly your blinkin right with regards to the £300 x 10yrs and abit pays my debts off I aint' the brightest when it comes to maths but your spot on.

Yesterday when I got off the phone from PAYPLAN I felt very deflated I'd been working on the principle it's my debt my responsibilty and I'll pay it all off eventually. But when someone who you think is there to help you tries to flog you insurance and then tells you to do an IVA I ended up very confused

debrag

I'm with Payplan and never had a problem, thankfully never needed an IVA.

If you're happy with it taking 15yrs to pay everything off go with a DMP, if you wages change or living cost change then so do your payment to the DMP