IVA or DM

Hard_up

Hello,I am new here and would like a bit of advice if poss.I have debts of around 30k these are borrowings on loans and credit cards to help continue in business I have a business partner already in DM and so the borrowing was left to me.Due to the lack of work I am thinking of an IVA but not sure how they work been that I am S/employed.And once set up will anyone go after my house,or is it a case of an agreed amount each month and thats it for 5 years.My house will prob be worth 250k and I owe 187k.The other option would be Debt management but when does that end once a monthly amount is fixed when does it end.and once again does my house feature in the equasion...thank you

ncollier1

If you pay it off, an IVA is better value for money than debt management, but if you fail the IVA, you will be much worse off because you will have to pay the high fees of the IVA company, so if you can be realistic about your income and outgoings and stick to a budget, an IVA is better.

Charco_2

You'd need to consider how regular your income is going to be too...

An IVA is more formal and will offer certain protections that the DMP cannot. An IVA is less flexible but not completely rigid if your circumstances change.

A DMP wont protect your house, but if you're showing willing then it's unlikely anyone will threaten your home (but they could). In an IVA your home would be protected but you would be expected to release equity from any asset you hold

(based on your figures above:
£250,000 x 0.85 = £212,500
£212,500 - £187,000 = £25,500... so you would on paper have about £25k equity in your property.

However, think about the valuation... is this realistic? Considering the market now and the fact that banks wont lend... Is £240,000 more reaonable? £230,000?

If you cannot release the equity then you can look at other ways to address it)

Lastly, a DMP will go on indefinitely. On the phone, your advisor will say "well Mr Hardup, you can afford to pay £350 per calendar month which means that in 85 or 86 payments you will be debt free... that's roughly seven years!"

The reality is though, your creditors will have no obligation to stop charges and interest - some will, some wont, some will for a while and then stop... when will it end? how long is a piece of string?