DMP going nowhere - IVA time?

bananah

Hi,
We're currently about 9 months into a DMP, and are getting a little worried.

The majority of our creditors have chosen not to freeze our interest, and as such the amounts we're paying back are hardly scratching the surface. For example, for one creditor we've paid back over £700 but have had about £550 interest charges. Therefore in reality we've only paid £150. If this goes on, the DMP will seemingly never end!

Is it worth us looking at an IVA? Are we able to do that? Is it our decision - I mean can we just apply for one? Should we?

We've sent letters to all creditors re CCAs, and are also thinking about offering F&Fs, but I just wondered what would be the best option.

The total debt was about £65,000, and we now owe about £60k. My wife is on maternity leave so we have had to drop our payments drastically.

thanks for any advice

fermi

Do you have a property with equity?

How much a month are you paying on the DMP presently?

Martin has written a quick guide on IVAs. Worth you having a read.

Link: Guide to IVAs - Are they worth it?

bananah

Yes, we have possibly £25k in total in the property.

Currently paying £560 pcm on the DMP.

cheers

bananah

Looking through Martin's IVA document, it doesn't look like its the right way to go.

Perhaps just trying F&Fs with the current creditors...

Tixy

Who are you doing your DMP with? Is it one of the free organisations? (there is some evidence that creditors may be more willing to freeze interest if you use a free organisation).

Have you written to them again asking to reconsider freezing interest or even asking if they will reduce the interest rate? (template you could use as a starting point on national debtline website)

I'm wondering could there be any unusual costs in your income & expenditure account which they might consider luxuries or disallow which means that they think you could afford the minimums which is why they won't freeze it?

Are you paying quite a high payment proportionally compared to the minimum repayment?

bananah

its with the CCCS, we have contacted them regarding this and they are going to contact all creditors again. They have said this:

"I have re-sent letters out to all your creditors asking them all to stop the interest charges. Although we cannot guarantee that they will, there is no harm in us asking."

Nothing in the account which is luxurious, we resubmitted it after my wife went on Mat leave, as the payments have had to decrease - maybe that is why they're not playing ball.

I'm not sure about your final question, are you asking whether the amount we're paying via the CCCS is proportionally to what we would be paying normally (e.g. outside of a DMP)?

thanks again

Tixy

Sorry - that wasn't point wasn't clear at all - I was sort of thinking outloud.

What I meant was if your proper minimum payment (before the DMP) with a creditor was, say, £100 and on the DMP you are able to afford £80 then they may be less willing to freeze interest than someone who could only afford £30 under their DMP.
Which I know sounds crazy but I just wonder if the worse someone's position is the more likely they are to freeze interest?

bananah

Possibly - I have no idea TBH.

The thing is I guess we thought that as long as we're making the payments then we're getting somewhere and paying it off. But if interest keeps coming, we're going to take years and years to pay it all off.

I think we're going to look at making F&Fs to see what might be acceptable.

thanks again

dancingfairy

I know some posters on here have written strong complaint letters companies along the lines of your website/literature states if we get into difficulties to contact you and go through a reputable organisation eg CCCS/CAB etc (obviously if you can quote their literature/website that is the way to go). Despite this and 9 months in you are still charging us. We have paid x amount on our dmp and you have charged us y amount. Clearly we do not feel this is assisting us to repay our debt to yourselves, we are committed to repaying this debt, blah blah blah.
Maybe put in we have been a loyal customer of yours for blah years (only if you have obviously) ,always paid on time (again only include if true) etc.
Send it as a complaint and you may get somewhere.
Otherwise I guess sticking with it and trying to get some kind of settlement figures.
df