Advice Please

zippy1234

Hi all,

I have a question about my fiance`s finances...

She has been on a debt management plan with Payplan for about 1 year. They really helped her out when here finaces were in a dire straight and have given her some breathing room. Recently she has a phone call with one of their advisers to check how long she would be on the plan for they confirmed at her current rates of payments it would be about 14 Years.

As a rough estimate her debts are with 3 creditors as follows

Lloyds TSB - Credit Card - £2000 - Pays £15 per month
Capital One - Credit Card - £4000 - Pays £2 Per Month
HSBC - Loan - £9000 - Pays £80 a month

The above are approx figures BTW

The advisor at Payplan mentioned that after she has paid off the DMP she would have top wait a further 6 Years to obtain credit. Is this correct?

Also they advised that if she was to enter an IVA it would take 5 years to pay off and only 1 year after to obtain credit.

At the moment she is managinh her finances very well. I am in a position to help her so looking fo some advice.

Should she carry on with the DMP and put extra money into it per Month to bring the overall term down. Or would it be better me saving some money each month towards this to give her so she could make Full and Final settlement figures down the line?

Or should she go with an IVA?

Any advice or help would be appreciated. We will be looking at buying a house in the next couple of years so would an IVA prevent her from coming in on the mortage more than an IVA.

Sorry for the long post :eek:

Thanks

gonzo127

well first off can you get her to fill in the SOA http://www.makesenseofcards.com/soacalc.html and post it up here for us to try and give any further advise (if any possible) which would allow her to up her payments normally

as to getting a mortgage i beleive it would be virtually impossible to get her on it if she was in a current IVA (although could be wrong) however even being on a DMP will impact it.

credit score question - well it is my understanding that the default will go on her file for 6 years after the default is put on which is normally within 6 months of missing the contractual minimum payments therefore if she has been in her plan for one year i would expect (although you would have to check with the credit reference agencies) that most of her creditors would have already issued defaults and would be likely to be 6 months old already therefore only giving 5 1/2 years left before they are off her file

as to upping payments or offering full and finals - i would personally advise full and finals since a lot of the time you can get reduced settlements which will save you money in the long run FYI here is a ROUGH guide on what companies have been known to accept,

please remember some people get lower amounts other have to pay much more than this,

these things depend on so many variables including what side of the bed the person in the company got out off

anyways rough guide is below

Debt still with original creditor NO default = 90% or more
Debt with original creditor but with a default = 75% or more
Debt with 'in house' debt collectors of the original creditor = 60% or more
Debt with external debt collector however still property of original credit = 40% or more
Debt owned(purchased) by external debt collectors = 25% or more

fatbelly

Can't see any point going for an IVA if she's not currently a homeowner. It's an insolvency solution so would be less suitable than full bankruptcy.

Funny distribution on the dmp - are you sure the payment to Capital One isn't something like £30 per month?

zippy1234

Thanks for the replies.

Gonzo127 - I`ll ask her to do an SOA but to be honest she is no longer in a mess financially (apart from the DMP!!!!) and I have advised her on things to cut back on like mobile phone shopping etc. I pay all the bills she just pays half the rent each month

Now I understand why they were saying an extra 6 years on the DMP after paying it off. The way it was explianed to her was that she wouldn`t be able to get any credit after DMP was paid off for a further 6 years.


Fatbelly - Yes I thought it was strange but it is definately correct (well approx think it is more like £1.85 or something). Don`t know why she pays a lot more to HSBC than the credit cards but it was the way it was set up.

Numpty_Monkey

I know this might seem a daft thing to chuck in
but while I was paying into my DMP (with CCCS)
Loan and CC accounts were roughly the same balance
but the loan got a higher payment than Credit Card:think:

But heres the thing
I wonder if they (CCCS,Payplan) workout the Pro Rata payments based on the contracted repayments, if the debt is still with the original creditor:huh:

If its with a DCA maybe then its the normal Pro Rata repayments

Ames

Something isn't right here. the payments aren't pro rata, and what you've been told about the credit rating is wrong. Her credit rating will be affected from six years of any defaults being placed on the record. an IVA isn't suitable as she doesn't have property to protect, and it costs a lot to set one up but Payplan seem to have been pushing them a lot lately.

I think full and finals are the way to go.