Bankruptcy or DMP

karenw

Over the last few months i have struggled to pay a bank loan to Lloydstsb due to my hours been cut at work, i contacted CCCS after a long chat with a lovely lady she suggested i go on a DMP or go bankrupt.
I owe just short of 9k to the bank and just short of 2k to a catalogue.

I am not sure which will be best for me, she said the DMP would be over 8 years which is a long time so i'm wondering if i should go bankrupt what are peoples views on Bankruptcy? Also I've heard creditors still chase you even if you have a DMP in place is this true?

Any advice greatly appreciated

IF

Hello karen, I'm sorry don't know anything about DMP's and it's really your choice to be honest. My advice would be to read as much as you can about DMP's and BR and if you decide on BR come back here and we will help you all we can.

Best wishes
If...x

Stayathomemom_2

karenw wrote: »

Over the last few months i have struggled to pay a bank loan due to my hours been cut at work, i contacted CCS after a long chat with a lovely lady she suggested i go on a DMP or go bankrupt.
I owe just short of 9k to the bank and just short of 2k to a catologue.

I am not sure which will be best for me, she said the DMP would be over 6-7 years which is a long time so i'm wondering if i should go bankrupt what are peoples views on Bankruptcy? Also i've heard creditors still chase you even if you have a DMP in place is this true?

Any advice greatly appreciated

We too were advised by CCCS to go with either DMP or bankruptcy, we choose the DMP as we felt we wanted to try all avenues first. Although our debts are much higher, our DMP is for 22years!!!! Bankruptcy will stay on your file for 6 years anyway, and if you are ever asked if you have ever been bankrupt after then, I believe you still need to declare it. BR has a huge impact on so many areas of your life, for example I applied for a job recently, which involved a credit check, I explained about the DMP and they said as long as I can prove we are making payments then that is fine, BUT if you are BR then you need not apply!!!!!

At first the creditors did still contact us and ask for more, but if you stick to your guns, tell them the same thing everytime, and never give more than the set DMP payment, then eventually they stop. We have been on the DMP for nearly a year, all creditors have stopped any interest and charges and we havent had a phone call or letter in about 8months. Just my story, all the best with your decision.

karenw

Stayathomemom wrote: »

We too were advised by CCCS to go with either DMP or bankruptcy, we choose the DMP as we felt we wanted to try all avenues first. Although our debts are much higher, our DMP is for 22years!!!! Bankruptcy will stay on your file for 6 years anyway, and if you are ever asked if you have ever been bankrupt after then, I believe you still need to declare it. BR has a huge impact on so many areas of your life, for example I applied for a job recently, which involved a credit check, I explained about the DMP and they said as long as I can prove we are making payments then that is fine, BUT if you are BR then you need not apply!!!!!

At first the creditors did still contact us and ask for more, but if you stick to your guns, tell them the same thing everytime, and never give more than the set DMP payment, then eventually they stop. We have been on the DMP for nearly a year, all creditors have stopped any interest and charges and we havent had a phone call or letter in about 8months. Just my story, all the best with your decision.

Thanks!

So going BR affects getting a job i never knew that :eek:is it complicated filing for BR? This is what really bothers me that the catologue will keep making threats to me and maybe even take me to court

Has the DMP really helped you i have done a lot of research on google but i'm still not sure which option is best for me it's all so confusing!

karenw

ifwisheswerehorses... wrote: »

Hello karen, I'm sorry don't know anything about DMP's and it's really your choice to be honest. My advice would be to read as much as you can about DMP's and BR and if you decide on BR come back here and we will help you all we can.

Best wishes
If...x

Thanks for the advice, i have done a lot of googling on the subject but i'm still unsure!

Stayathomemom_2

karenw wrote: »

Thanks!

So going BR affects getting a job i never knew that :eek:is it complicated filing for BR? This is what really bothers me that the catologue will keep making threats to me and maybe even take me to court

Has the DMP really helped you i have done a lot of research on google but i'm still not sure which option is best for me it's all so confusing!

We were in a pretty bad state to be honest so yes it has helped us in that everybody is still getting paid, but it is just going to take alot longer, but we are hoping to increase the monthy amt soon. We are at the stage where we will do everything to avoid b/r, but it is knocking at our due to a tax bill, if it wasnt for that, the DMP would be fine. The thing that bothers me is losing my bank acc, debit card, if you apply for certain types of ins you have to declare the br, or if you are trying to rent, it is nearly impossible to do it without a guarantor, so for us we are clinging on for as long as we can.

dancingfairy

O.K a quick summary of the main points:

dmp: an INFORMAL arrangement between you and your creditors. Pros- you pay what you can afford so if your spare money goes up you pay the creditors more ,if it goes down you pay them less.
- hopefully over time you would earn more money/shave your outgoings and be able to save up to offer full and final settlements.
Negatives- it affects your credit file - the creditors will get defaults put on your accounts
-they MAY also take you to court and you MAY get a CCJ against you - you can make sure this is set at a rate you can afford though normally
- the creditors don't have to stop interest - although most do after a few months,some take less time ,some more time.

Bankruptcy - a formal process
Pros- it's over in 6 years
- the creditors have to abide by it (so do you)


Negatives - you will be prohibited from doing certain jobs - ie in accounts/law - usually that type of thing - but do check with regards to your line of work
- you MAY loose your house - it depends on if there is equity in it etc
- you will find it hard to get credit for a while, but it is not forever - but I believe you have to declare if asked.
- you may be expected to contribute to your bankruptcy - if you have a surplus after your monthly bills are calculated (they have set guidlines for amounts you can spend for food, clothes, etc - similar to a dmp but the amounts are different).

It really depends on you and your situation - how much spare income you have, what you job situation is (if you work in law/accounting etc then obviously bankruptcy will be less helpful) is etc.
The debtfreewannabe forum and this one should give you some ideas as to what is likely to be best for you.

You can of course start a dmp and see how it goes and if things don't work out go bankrupt - this obviously would delay bankruptcy if it was your best option but it might be worth considering.
df

affluenza

If it is less than £15K then surely a DRO - debt relief order may be a better alternative - it is also cheaper and less damaging than a full blown BR from what I understand.

dojoman

affluenza wrote: »

If it is less than £15K then surely a DRO - debt relief order may be a better alternative - it is also cheaper and less damaging than a full blown BR from what I understand.

It is not just about the figure you owe, there are quite a few other factors taken into account, like disposable income, assets etc.

karenw

dancingfairy wrote: »

O.K a quick summary of the main points:

dmp:
Negatives- it affects your credit file - the creditors will get defaults put on your accounts
-they MAY also take you to court and you MAY get a CCJ against you - you can make sure this is set at a rate you can afford though normally
- the creditors don't have to stop interest - although most do after a few months,some take less time ,some more time.

So it looks like a dmp isn't really worth the paper it's written on then if creditors decide to take you to court!

angiebhfx

dancingfairy wrote: »

O.K a quick summary of the main points:

dmp: an INFORMAL arrangement between you and your creditors. Pros- you pay what you can afford so if your spare money goes up you pay the creditors more ,if it goes down you pay them less.
- hopefully over time you would earn more money/shave your outgoings and be able to save up to offer full and final settlements.
Negatives- it affects your credit file - the creditors will get defaults put on your accounts
-they MAY also take you to court and you MAY get a CCJ against you - you can make sure this is set at a rate you can afford though normally
- the creditors don't have to stop interest - although most do after a few months,some take less time ,some more time.

Bankruptcy - a formal process
Pros- it's over in 6 years
- the creditors have to abide by it (so do you)


Negatives - you will be prohibited from doing certain jobs - ie in accounts/law - usually that type of thing - but do check with regards to your line of work
- you MAY loose your house - it depends on if there is equity in it etc
- you will find it hard to get credit for a while, but it is not forever - but I believe you have to declare if asked.
- you may be expected to contribute to your bankruptcy - if you have a surplus after your monthly bills are calculated (they have set guidlines for amounts you can spend for food, clothes, etc - similar to a dmp but the amounts are different).

It really depends on you and your situation - how much spare income you have, what you job situation is (if you work in law/accounting etc then obviously bankruptcy will be less helpful) is etc.
The debtfreewannabe forum and this one should give you some ideas as to what is likely to be best for you.

You can of course start a dmp and see how it goes and if things don't work out go bankrupt - this obviously would delay bankruptcy if it was your best option but it might be worth considering.
df

You can still work in Accounts you just can't be an Accountant. You may have problems in employment if you work or want to work for a bank or a Building Society as they usually have a clause in the terms and conditions. You don't have to tell anyone you are bankrupt unless the ask you.

You can still apply for credit up to £500.00 but you must tell them you are Bankrupt

You are Bankrupt for up to one year unless the Official Receiver thinks you have done something wrong in which case he could ask for a BRU/BRO, but as your problems have arisen out of a change in circumstances this wouldn't be very likely. You are discharged a year after but it will effect your credit file. When you are discharged follow the instructions on here to clean up your credit files.

You can still get a Bank Account with either Co-op or Barclays, the Co-op account has a debit card and you can set-up direct debits and do your banking on-line. A word of caution though, you can not go overdrawn and if you do more than twice the account will be closed.

My Dad declared himself BR 8 years ago and he has had credit again since.

The court will want to make sure you have sought advice and that you have spoken to agencies such as CCCS and/or CAB. If you are at risk of losing your home then Shelter might be worth contacting.

Good Luck