IVA or DMP - advice needed!

steve10_2

Hello,

Totally new here and really just beginning to face up to the reality of my debt. I've spent years building it up, safe in the knowledge that 'something will come up' and I would somehow make it magically disappear. It hasn't and my options are getting fewer and fewer. Not yet being taken to court, but I reckon it would only be a matter of months.

Anyway, I've taken the first steps and completed the CCCS debt remedy questionaire, and they have suggested firstly an IVA and secondly a DMP. Personally, I would prefer that they just gave me one option! My question is which do I go for? My financial summary taken from my budget is below:

• Monthly income = £1350
• Monthly priority outgoings = £1093
• Monthly contractual payments = £801
• You have 5 creditors
• Your total credit debt = £27628
• You have £257 left over each month once you have covered all of your priority expenditure.

What do I go for, and what are the pros and cons? I know IVA lasts 5 years, and they estimate 9 years with the DMP - so is there any benefit in going for this. I am not a home owner and am dealing with these debts as an individual, rather than involve my partner, who is getting fed up with paying my bills from her salary because my pay goes on debt payments...

Any advice gratefully received!

Steve

RAS

Hi

If your job is wholly secure for the next 5 years and IVA might allow you to pay reduced settlement. However for the rest of your life you have to declare that you have had an Insolvenecy arrangment, if you are asked. Payments can only be reduced if your creditors agree and if they do not the IVA fails and you may have to go for bankruptcy.

If you go for a DMP, if you situation changes, even if it is the boiler blowing up, then the debt charitiy can negoitiate a variation in your payments quickly, and can revise it upwards if you have extra money. Once the debts are with DCAs you may be able to build up sufficient saving to make full and final offers - starting as low as 30% - to settle the accounts.