DMP or IVA?

soniap

Hello,
I have £46K of unsecured debt on a DMP with Payplan. This was set up in March '10. My salary is £27K and it is estimated that it will take me until 2021 to repay the debt. Most of it is credit card debt, which escalated when interest rates went up to 30% on almost all my cards. I started using the credit cards to pay for living expensess and trying to keep up with monthly repayments.

I'm concerned that the DMP is not legally binding so at anytime the banks could start charging me interest again and potentially make me insolvent. Recently the Halifax passed my debt to Westcot and they demanaded immediate payment of £10K! I managed to explain and things are ok now, but I've just realized that despite my regular monthly payments to Payplan the Halifax balance has actually gone up instead of going down!?!? I approached them about it at the time and they explained the DMP expired after 3 months and I did not contact them, so they started applying interest at 29% on my balance. They then promised to refund the charges but they refunded only £52 which I can't work out what it is....when I called them again they said they could not discuss my account because it is now with Westcot, yet Westcot can't discuss my balance !?!??
I've prepared a letter to the Halifax to ask for a refund but I'm wondering if all the worry and stress and admin work would be reduced if I had an IVA. I've read that interest is frozed and you pay what you can afford for 5 years and the balance is written off.

I should also say that my partner and I have two mortgages one for the property we live in and another on a small flat which was meant to be an investment, but we have just about managed to break even so far.

How would these 2 properties be affected by my IVA? Could I be forced to sell the property we let, even if my partner does not agree? I only own 50% of both homes an my partner is determined not to sell either of the properties yet. He lends me money occasionally and listens to me if I want to talk but he cannot offer any advice...so I prefer not to talk about it with him.

I'm also at the end of my studies to become a Chartered Accountant and I don't know if and how this could affect my membership. I worked and studied so hard for the qualification and I don't want to be thrown out of the ACCA because of my debt problem....I'm very embarassed about the situation and cannot speak to friends or family about it.... I should also add that when I complete my qualification [June 2011] my salary should increase to £35K, as promised by my boss.

I tried the CAB but they looked down at me because I was an accountant and I was on a good salary and had two properties on a mortgage.... I know there are people in situations much worst than mine, but I was taken in by the "special offers" and constant credit limit increases offered, which I now know was a mistake and now want to get this resolved, for peace of mind.

I just can't face 10 years of repayments knowing that at any time interest could be applied again and my debt would become twice as large as it is now, in no time or worst I could be taken to court and made bankrupt.....then after 10 years my credit rating is ruined for another 6 years, so it feels like my life is over...I'm 44 now I will be retired by the time I can get my credit rating back to normal...I don't know how I'm going to manage to carry on....

Can anyone offer advice as to what it would be best for me to do, stay on the DMP or get an IVA?

Thanks
Sonia

podperson

Hi Sonia,

Personally I would advise staying on the dmp, you only have 2 years left to go so don't really want to be exchanging that for a 5 year plan. I'm not 100% sure on the accountancy profession but I know they really frown on bankruptcy and therefore might not be very keen on an iva either so would be a little risky that way as well.
If most of your debt is on credit cards were you getting charges on them? I am currently claiming all mine back and has cleared two cards off just from having these refunded. Might at least make a dent in the balance and let you clear them off a bit quicker. There is a guide in the reclaiming forum or feel free to pm me if you need any extra help x

soniap

Thanks for your advice, but I made a typo! It will take me another 11 years to pay, ie 2021, that is why I'm so worried! I will make the effort of claiming charges back on all my cards though. That should help....

NorthernLas

Sonia - You can edit your first post to correct the date, then when others read they will not be thinking you have only 2 years to go.

You need advice as to how an IVA would affect your jobs prospects. There is an IVA thread in the bankruptcy forum - maybe if you post there.

Also see this link http://www.insolvencyhelpline.co.uk/iva/will-an-iva-affect-my-employment-or-my-ability-to-get-a-job.php

And this one for debt options http://www.nationaldebtline.co.uk/england_wales/page.php?page=35_options_for_dealing_with_your_debts

You are correct freezing interest is voluntary, I would say you need to keep writing to them and ask them to re-consider.

RAS

Sonia

Also dom an SOA, so peopelk can see what your situation is.

You will have to release any equity in your properties if you do an IVA (half of it if it is joint oqwnership).

Moglet

If you stay on your DMP with Payplan don't just make your payments and assume everything will be ok. My partner did that for over 6 years and now owes about £7k more than when he started plus Payplan don't always get the payments there in time for the various due dates so you might want to check your due dates and get them moved to later in the month if you can.

I always thought my OH should have been in an IVA rather than a DMP given his debt was over £60k, he owned a house (jointly), was able to pay a decent monthly amount and his DMP was estimated at over 7 years which is now grown to about 8.5! However Payplan advised against the IVA due to him having a house.

dorisday

My advice would be stick with the DMP but when you have got your increased salary, start saving up to make reduced final settlements. just dont think about the dmp payments, just look ahead a few months and not 11 years.
And yes it will affect your job as a chartered accountant but not the dmp but definately an IVA as its really a form of bankruptcy, and if something goes wrong with an IVA (you loose job) they will make you bankrupt and you will loose most of what you have paid the insolvency company
Try and post up a SOA and I bet the great folks on here will be able to suggest ways of cutting your expenditure.

soniap

dorisday wrote: »

My advice would be stick with the DMP but when you have got your increased salary, start saving up to make reduced final settlements. just dont think about the dmp payments, just look ahead a few months and not 11 years.
And yes it will affect your job as a chartered accountant but not the dmp but definately an IVA as its really a form of bankruptcy, and if something goes wrong with an IVA (you loose job) they will make you bankrupt and you will loose most of what you have paid the insolvency company
Try and post up a SOA and I bet the great folks on here will be able to suggest ways of cutting your expenditure.

Thanks dorisday I will try to post an SOA asap... everytime I think about this problem I feel completely overwhelmed with worry ... I find dealing with this problem emotionally draining....I will have to stick with the DMP, because of the consequences of the IVA on my career... I don't want to throw it all away now, if it can be helped.

Why do you say it's best to save for reduced final settlements once I get a pay rise? should I not be increasing my DMP monthly payments as soon as I can? Sorry I'm not sure what you mean....thanks again

soniap

I've now corrected the date!

soniap

Moglet wrote: »

If you stay on your DMP with Payplan don't just make your payments and assume everything will be ok. My partner did that for over 6 years and now owes about £7k more than when he started plus Payplan don't always get the payments there in time for the various due dates so you might want to check your due dates and get them moved to later in the month if you can.

I always thought my OH should have been in an IVA rather than a DMP given his debt was over £60k, he owned a house (jointly), was able to pay a decent monthly amount and his DMP was estimated at over 7 years which is now grown to about 8.5! However Payplan advised against the IVA due to him having a house.

Moglet
I thought Payplan would look after my DMP and communicate with my creditors about any issues, but it seems that they don't

Some of my creditors have stopped sending me statements, I think it's the debts which have gone to collection agencies. Can collection agencies add charges to my debts, such as interest and penalties if the payments arrive to them later?

I'm just wondering if I should manage the DMP myself, I could set up standing order payments which will arrive much quicker to creditors, it takes Payplan up to 10 days to clear my payment and then a few more days to send it off, I've asked them many times, they never commit to any dates, it's relly annoying.....