IVAs and the debt management companies

HeaddyMX

As some of you might know I'm around £30,000 in debt, no thanks to a lousy university education. I'm in a full-time job but the salary has been awkward - so I was considering using one of these companies that claim to "reduce your debt" by 50 to 75 percent.

I've contacted ClearDebt, who recommended from the outset getting an IVA, and I'd make monthly payments of around £370/month for the next five years if I went through with it.

At the moment I'm waiting for the outcome of a claim for bank charges, which would affect how much I would have to pay back - but does anyone have any experience of these companies? Surely it sounds too good to be true.

CLAPTON

whether or not an IVA is suitable depends upon your situation.
contact CCCS or Payplan to get independant advice...cleardebt have a fested in recommending an IVA as they make money out of it.

you can also post an SOA on this board..there are people here who can give you help and advice.

Dr.Shoe_2

NEVER use a DMP company that'll charge you money. Use Payplan or CCCS instead.

Wonder_Girl

HeaddyMX wrote:

I've contacted ClearDebt, who recommended from the outset getting an IVA, and I'd make monthly payments of around £370/month for the next five years if I went through with it.

Well they are going to recommend an IVA, that way they make £7k out of you!

The amount of £370 is subject to change, they will "review" your circumstances periodically and if you get a pay increase etc you will be expected to increase your monthly deposit so you could end up paying back almost all of your debt anyway.

You REALLY need to get some advice from one of the debt charities before you proceed.

If you can afford £370 a month then you could be debt free with a DMP in under 6 and a half years without the £7k fee.

Also if you have a student loan you want to include it isn’t guaranteed that it can be included, it is decided by the SLC and if they decide they are getting a better deal already they won’t be included in the IVA, however the IVA will still go ahead minus the student loan balance and you will continue to pay the student loan as normal.

WG xx

waytogo_2

Please do not use CCCS and Payplan as they do charge by increasing your dividend/monthly payment and take it from the creditors payments.

Molanole

waytogo wrote:

Please do not use CCCS and Payplan as they do charge by increasing your dividend/monthly payment and take it from the creditors payments.

Have I got this wrong or something? I thought CCCS and Payplan were the only ones recommended on here and that all the others imposed over the top charges for their services

notmyrealusername

CCCS and Payplan are non profit making and DO NOT charge any fees or take any percentage of your payment in a DMP (Debt Management Plan).

If you enter into an IVA there are fees - typically 6 - 8k payable to the insolvency practioner and these are taken from your payment, not in addition to. CCCS do not run IVA's but can put you in touch with a reputable practioner. Payplan have a sister company, Payplan Partnership, they arrange the IVA so it is all done through Payplan.

Hope this helps.

Wonder_Girl

waytogo wrote:

Please do not use CCCS and Payplan as they do charge by increasing your dividend/monthly payment and take it from the creditors payments.

Get your facts right hun, CCCS and Payplan DO NOT charge for any services, that’s why they are charities.

AGB863

The other thing about an IVA - it takes 5 years to go through - then you credit rating will be affected for a further 6 years.

Not sure you can include a student loan with an IVA - I know you can not include it if you declare bankruptcy - so check it out.

notmyrealusername

AGB863 wrote:

The other thing about an IVA - it takes 5 years to go through - then you credit rating will be affected for a further 6 years.

An IVA can be over 72 months however the typical term is 5 years, the credit rating is only affected for a further year making six years in total. After six years the IVA will not be shown, although in my case the only credit I would ever consider taking out is a mortgage in the very distant future.

HeaddyMX

Thanks for pointing me towards CCCS and PayPlan; had I not spoken out I would have been trapped in an IVA without knowing it!

In the end I decided to state my own 'need' and contact PayPlan. The good news is that debt management is their suggested option, and I'd be paying around £270/month for the next four years. I sure hope I'm in work that long!