IVA/DMP Meaning and Definition

stiltoncheese

Hi everyone

Bit of a random question but you are all very helpful so thought this is the best place to ask - BG's please move if it's in the wrong place.

Anyway, I have a job interview coming up (and I really want the job) and one of the questions they are going to ask revolves around what advice I could give to people with lots of debt.

I know all about Payplan, CCCS and CAB (from this very website), who they are and what they do, but I thought it would help my cause if I could explain in a bit more detail.

However, although I know pretty much what they are for, I don't know what DMP or IVA actually stands for, and what the difference is between the two. While I have some debt, i'm lucky enough not to need a DMP/IVA so am a bit ignorant of the differences etc.

Anyway, I do believe i'm starting to waffle, so i'll shut up now!!

Thanks in advance for any help, and again sorry if this is not the right place to post.

Snaggles

Hello!
DMP - Debt Management Plan
IVA - Individual Voluntary Arrangement

Not sure of the differences to be honest, but at least this will bump your thread so hopefully someone who knows more will be able to explain!

Good luck with the interview, hope you get it!

stiltoncheese

Thanks Snaggles, that's great.

My thanks button does not seem to be working for some reason (or my smilies) so Manual Thanks sent!!!.

Snaggles

That's okay, you're welcome! Manual thanks manually accepted lol .

I think the one of the main differences appears to be that a DMP is not legally binding, whereas an IVA is.

The Payplan website has info on both - have a look here. On the left hand side there is a menu, and under the 'Debt Solutions' heading, there are options to read about both IVAs and DMPs. Haven't had a full read through, but hopefully there will ne some useful info there for you.

CLAPTON

i would suggest you google the terms and see what you get but briefly

if in debt then the following can apply

a. try to increase income and decrease spending....if successfully then you can use more money to clear the debts

b. if not possible to do (a) above then can try a DMP. basically you can do this yourself or via CCCS or Payplan or various sharks but this involves
defaulting on your debts, paying only what you can afford, asking your creditors to freeze interest and charges. some will and some won't, some will after a while but most will review the situation. if the situation continues for along time, many of the debts will be sold off to DCA. Your creditors may of course apply for CCJs, charging orders on your house, attachment of earning etc. Often the time period for these is very long.
eventually it may be possible to do F&F offers if you have the money to do it.
in my view these should really only be seen as a short term solution where you expect your circumstances to get better but nevertheless many people treat them as long term solutions because they can avoid bankruptcy.

c. depending upon your circumstances a IVA might be appropriate. usually you would have debts of at least 15,000 be able to pay at least 250 a month and be sure you could do this for 5 years. in return you have a legally binding agreement, interest and charges are frozen and after the five years you are debt free. your creditors vote on the deal and if 75% by value agree then its binding on all on them. sometimes you may have to remortgage your house to release equity. if you fail to keep up the payments you may be made bankrupt.

d. the last option is bankruptcy. this is very suitable if you have no equity in a property and no assetts.

stiltoncheese

My Thanks button seems to be working now (must just be my work computer) so I have thanked you both properly (oooh, smilies working too!)

That is basically all I need to know, as I can advise on the 0% deals, snowballing, etc already.

Fingers crossed for the interview now

Thanks again guys.