Confused - IVA Vs DMP

Chillimonster

Just had a nice chat with a lady from Payplan following my conversation this morning with an advisor giving all my ins and outs etc.

The two options that are available to me are the IVA and the DMP.

The DMP would last 8 years and the IVA 5 years, but i know its not as simple as that, and was after some advice as to the advantages and pitfalls of each.

Please...............

Chilli

Tixy

Hi

This might be useful http://www.moneysavingexpert.com/loans/pdf-iva-guide.pdf
There are certainly pros and cons to each depending on your personal situation. Its worth mentioning that whilst Payplan are often very good if you went for an IVA with them they would make £000s in fees, whereas in a DMP they would make nowt. So might also be worth considering getting advice from a charity.

Some would argue an IVA is good because its legally binding, others would say its bad for the very same reason.
One of the key things to consider (I think) is the stability of your income. It really does need to be stable to be in an IVA, as with a DMP there is usually much more flexibility if you have a change in circumstances.

I assume you have assets you want to protect? a house? you need to consider that in an IVA you are usually required to remortgage to release equity after 5years (if you have any at that point).

There is a similar thread I think, I'll look for a link.....
https://forums.moneysavingexpert.com/discussion/2542045
and
https://forums.moneysavingexpert.com/discussion/2451509

crispycornflake

Hi Chilli, we were also given 2 options through cccs but went with the dmp which was forecast at 14 years initially!! We chose this over an iva because things can change over the next few years and the way we look at it we hopefully will be able to reduce it a lot quicker. The main difference is that a dmp is not legally binding where the iva is and it is a form of insolvency, so if you opt for the iva it will be on public records. We are hoping to up our payments to the dmp soon and you can always offer full and final settlements to smaller debts then throw more into to the larger ones to get them paid off quicker. At the end of the day it is up to you but make sure you get all the info about both, take time to digest it then you will make the right decision. Good luck.

Chillimonster

Thanks for the advice. Decided to go down the DMP route.

Deep_In_Debt

I've never been able to get my head round the equity release bit in an IVA. Surely, by doing that you are not clearing your debts but adding by way of a secured "loan" over a long period at a rubbish interest rate and putting your home at risk. Kind of defeats the object in my opinion.

Anyway, as long as you are happy with a dmp. I chose that too, and reduced my original 9 year term in 2008 to now 2.5 years and a lot sooner if I have my way. It's flexible and that's important.

Good luck.

Chillimonster

Thats why i went with the DMP - the flexibility IF i need it, plus the equity release thingy..

Anyway the main thing is i'm happy with the decision, and hopefully it'll work for me (at least until i win the lottery!! )

Chilli

Deep_In_Debt

Chillimonster wrote: »

Thats why i went with the DMP - the flexibility IF i need it, plus the equity release thingy..

Anyway the main thing is i'm happy with the decision, and hopefully it'll work for me (at least until i win the lottery!! )

Chilli

Well, if you win the lottery then please remember me...:D
I'll be your best friend, promise....:p:o

glad you are happy with your decision...I'm glad i did the dmp route.

Please keep posting and let us know how you are getting along.

Chillimonster

Deep_In_Debt wrote: »

Well, if you win the lottery then please remember me...:D
I'll be your best friend, promise....:p:o

glad you are happy with your decision...I'm glad i did the dmp route.

Please keep posting and let us know how you are getting along.

Thanks - Will be a regular poster as its quite therapeutic to be in the company of others in the same boat.

And as for the lottery win - if i drop the 'big one' then its drinks all round