IVA or DMP?

GlossyBird_2

I have debts of around £44,000 6 creditors

Money left over after all essential spending is £292

Would you go IVA or DMP?

I'm veering towards DMP as it seems less invasive, our house is mortgaged, not enough equity to remortgage.

I cannot see anyone about this at CAB for 3weeks! Who else should I see/talk to for independant advice?

Thank you for any advice

Charco_2

I know we've already spoken so it's probably not my opinion you're looking for BUT with £44,000 debt and a disposable of £292, it will take MORE than 12 years to pay off your debts in a DMP.

Most Debt Management companies will take first two payments (sometimes three) plus a monthly fee of say 15% (minimum) per month thereafter.

So that's £292 x .15 = £43.80 (to take away the 15% fee)

Every month you will pay £248 to your creditors.

£44,000 divided by £248 = 177 this is the number of monthly payments you will have to make

plus the three at the start equals 180, divide this by 12 = 15 years!

And this is assuming that your crediors will agree to freeze interest and charges on your account for the duration. However, since Debt Man is an unregulated field and the arrangements are informal, even if your creditors agree now, they could change their minds later and begin to pursue the debts again!

I could waffle on and on but i'll stop now. Sorry for hogging the answers here, perhaps someone will be along soon to offer other advice.

GlossyBird_2

Thank you
I didn't realise that a DMP could only last 12 years.


This is from Payplan

Free Debt Management Plans (DMP)

A DMP is an arrangement between you and your creditors which we manage for you.
You repay your debts at a rate you can afford and we help remove the stress by dealing with your creditors.
Payplan does not charge fees for debt management plans.

Is that just clever wording?
I wondered what was in it for them.

Charco_2

No sorry, sorry if i gave that impression, a DMP can last however long it takes til the debt is paid... it's up to you to decide if that is the right solution for you when compared to other solutions!

I mentioned 12 years because when i first worked it out, that was how long it was going to take without fees! With fees it takes, well, 15% longer - but as i say, that's IF the banks all also freeze their interest rates and charges for you, which they dont have to.

I don't know a lot about PayPlan but would assume a similar type arrangement as with CCCS. These two companies (for Debt Managements only) work in a different way to other Debt Man companies. They recover the debts on behalf of the credit houses without charging you a fee. The credit houses then return to them 15% of their recoveries. It's huge amounts of money but importantly, YOU'RE NOT PAYING IT, the banks are. Other debt management companies charge YOU the 15%.

I hope I haven't confused matters for you!

diane105

Hi there I understand your situation as we've found ourselves in the same situation - we have £22000 and can only pay £119 a month at the moment on a DMP -at this level will take 14 years to pay off but I am in the process of seriously slashing our budget. I would really advise contacting the CCCS either by phone or completing the debt remedy online through their website. We were going to go with a debt management company that were charging about 17% in fees each month. The CCCS do not charge for a DMP so every penny goes to your creditors and you can keep track of your payments online. Hope this helps and good luck.