IVA v's DMP

Maximillion

Thanks for the replies everybody - I appreciate everyone's situation is complicated and I need to talk to different providers. I just want to get as much information about options and possible scenarios before I do. Historically I'm a sucker for any well constructed argument. It's a big decision and I want to be prepared.

So far I'm leaning toward an IVA. Death by credit history scares me but the non finite option of a DMP in terms of longevity, harassment and it's own credit damaging properties seems less attractive.

If I do go down the IVA route (if it is possible) I want to avoid any nasty surprises a few months or years in. If I can mitigate problematic issues like cars, childcare, study etc. before I take the plunge than that's what I want to do.

Sorry to bang on - but can anyone shed light on some of my original questions with reference to being in an IVA:

firstcrowcounter wrote: »

My income is variable. I receive half my expected annual wage as a salary paid monthly the other half is made up from a day rate received monthly for the days I worked during that month. Consequently. I need a buffer to ensure a regular monthly payment. Is It possible to negotiate an IVA in this situation?

My car is currently leased - I'm not sure it can be proved I need it for my job but my wife undoubtedly needs it to ferry all the children about (eldest is six and we are expecting in August) Assuming I could keep the car, what happens in two years time when the lease expires?

My wife goes to college and I pay considerably for childcare to allow this. How is education/childcare viewed by creditors/IP when establishing an acceptable budget?

My status as a seafarer means in some (fairly difficult to achieve) circumstances I can claim income tax relief. If I achieved this during my IVA. How would the proceeds be split?

My mortgage is currently on a variable rate and consequently very cheap at the moment, What happens when the rates go back up? I understand you can relay changes in circumstances to your IP but how quickly does the system react? Do the creditors have to re-vote every time or is there some leeway?

RAS

FCC

You definately need to ask one of the debt charities about how they would expect this to work. Y

u would also need to make absolutely sure that your creditors knew and agreed in writing that variable payments were acceptable (remember they have to agree to any IVA, it is not something you can just choose).

If you do decide to do an IVA, get your IVA provider to provide you written confirmation that they will accpet variable payments.

Also make sure that your I&E is acceptable to you,; IVA budgets are a lot less generous than those offered to people in DMP or in bankruptcy.

Charco_2

Tixy wrote: »

It won't be a further 6 years for the defaults to clear. Defaults are places at a set point in time, usually after around 3months. Therefore if the DMP is expected to take 6years then the defaults will all have gone around 3months after the DMP.

Defaults are places at a set point in time?

Yes and every month you don't make your contractually agreed payments (as per your original credit agreement, not the informal debt management agreed repayments) your creditors are entitled and do put default notices on your credit file. You don't simply default the repayment once, you default it every month you dont make the required repayment!

MrsTinks

*sigh* once the account has been defaulted that's it - it's as bad as it will get. It's a set point in time - yes - and the default marker will drop off after 6 years. It will not get a new default marker every month.

IVA's... are only suitable for a VERY small number of people - unfortunately a lot of misselling takes place with the super duper adds on TV these days...
And I know it's been mentioned but your creditors may very well refuse an IVA btw...

If you are 10% in negative equity I think you should look seriously into what bankruptcy would mean to you and your family...

As for your wife studying... what are her likelyhood of getting a job in that area when she finishes? How long does she have to go? Can she take a year out and continue later?

You call it your IVA and your debts - but as a single income household you need to realise that it's been down to BOTH of you. You cannot accept single responcibility for all of it - she spent the money too and probably had a better idea of what what going on than you if you were out at sea...

fermi

Charco wrote: »

Yes and every month you don't make your contractually agreed payments (as per your original credit agreement, not the informal debt management agreed repayments) your creditors are entitled and do put default notices on your credit file. You don't simply default the repayment once, you default it every month you dont make the required repayment!

Nonsense.

A creditor can only record a default with the credit reference agency once.

Once it has been registered with a specific date, then the only thing that can be updated is the monthly status code on the credit report and the outstanding balance.

You DO NOT receive a fresh default every month.

The default itself stays registered with the initial date.

As such, the default and ALL details/records of the account are removed from your credit reference file 6 years after the default is first recorded.

So once someone in a DMP has defaulted and had that recorded, then that account stays on their credit record for 6 years from that initial default date. After those 6 years, the account is removed from their credit record, EVEN if the DMP is not finished or the debt still not settled.

Tixy

Charco wrote: »

Defaults are places at a set point in time?

Yes and every month you don't make your contractually agreed payments (as per your original credit agreement, not the informal debt management agreed repayments) your creditors are entitled and do put default notices on your credit file. You don't simply default the repayment once, you default it every month you dont make the required repayment!

Oh dear. I hope you don't advise your clients on that completely incorrect statement. One debt = one default on one date.