DMP or IVA HELP NEED ADVICE

debtiva

Hi,

I don't know how to start a new thread, so i am tagging along.

I need help real bad.

I have contacted payplan and cccs both have suggested either an iva or dmp, the dmp would be over 15 years (forever)

I really need some advice as to which is the better one to get into.

I have 75,000 worth of unsercured debt, £14000 is what my father inlaw lent us to get a better morgage deal, both payplan and cccs have taken his loan to us into account.

we have our own house which is worth 245000 but a 207000 morgage so not enough equity to do much with.

we also have 6 children so i really really don't want baliffs turning up on our doorstep!

we have kept up payments on all our debts up until this month, we have only been able to keep up with payment by borrowing more debt to pay debt and are only being able to get food by paying the min amount from one c card and using what left to buy food, things have just spiralled.............i have had to buy xmas presents on a catalogue, we have had the catalogue for ages but have created new debt on it, due to xmas.

So from this week we won't be able to pay overdrafts, c cards, loans, catalogues or even my father in law..............

i have finally got to rock bottom and said enough is enough, things have spiralled enough , once we have paid the essential bills, gas elec , food etc we have £300 surplus which no where near clears min payments of £1700 a month which is why i have sought help.

we have always paid debt never been behind with payments, so want to know how long it will be for the creditors to start ccjs and balliffs?? i am terrified but can't do anything about it as i just haven't the money to pay any of them.

would it be better to have an iva or dmp? how likely is it for creditors to still pester and takje you to court etc if you in a dmp.

payplan have said it would take 6 - 8 weeks to do an iva, they where the most helpful on the phone but cccs where pretty good too, not to sure which one to go with but payplan are only 7 miles away from me , i am waiting for them to ring me this week to arrange a face to face as i am self employed , my husband is in full time work.

do i need to start to send letter to my creditors explaining things and send a token payment or do i wait for payplan to talk to them????

i need to decide is an iva or dmp is best first though.

the dmp plan i think would be better but its over such a long time and i am scared the balliffs etc will still come in with that one???

the iva sounds good but i don't want to then to remortgage in 4 and half years time to pay off even more to the creditors , payplan have said that its very unlikely i would get a remortgage in 5 years time anyway due to being in an iva and have said the creditors would ask us to ask 3 banks for a remortgage and if all 3 said no then the worst case would be we would just have to stay in an iva for another year.

how true is this has anyone any expereince with this??

please please if anyone has some advice as i really don't know what to do??

To_be_Free

I have been in an IVA for almost two years now and it was the best thing I every done!
I went though CCCS and the first thing they advised me was to get a basic bank account with no connection to any of my debtors and write to each of them telling them my situation and that I was applying for an IVA and send them a token payment each month.
And yes I did get harassed by a few of them most said they would put a stop to the calls for a few weeks but once my IVA was approved it all stopped and I am now looking forward to being debt free.

debtiva

how much debt were you in?.
just worried they may turn it down , also the biggest worry is having to sell the house or remorgage when they ask in 4 years

To_be_Free

debtiva wrote: »

how much debt were you in?.
just worried they may turn it down , also the biggest worry is having to sell the house or remorgage when they ask in 4 years

Hi it is all a worry when you first start on the debt free road, I would love to say it is easy but I would be lying, and you must do what you think is right for you.

milliemonster

we are just going through an IVA proposal at the moment, I would honestly say that a DMP over 15 years is just ridiculous, considering your creditors are not guaranteed to stop interest and hassling you during that time.

We are in a similar position to you, and this month on the advice of the IVA company we are going with have stopped payments completely, this is the first time in 15 years we have ever missed a payment of any kind and yes it's scary, we have had a few calls but are dealing with it.

It is likely that in an IVA you would have a clause requiring you to either remortgage in year 5 to release equity or extend by a further 12 months. However, don't let this put you off, they will not sell your house from under you, and by going into an IVA you will not be able to remortgage anyway so you would just have to make additional IVA payments for a few months more.

Regarding your equity, we currently have about £15k I thought, however, the IVA company expect you to get a valuation of your property for a quick forced sale, this means the lowest valuation possible so it may be you don't have as much equity in your current property that you think you have, on top of this, the valuation for equity release is only 85% LTV, so the creditors would not expect you to release any equity above 85% LTV which reduces your actual equity further. For us, they believe this would look like we don't actually have any equity, although we have to wait and see.

You have to do what's right for you, for us the other option is a DMP for 15+yrs, even if I had lots of equity, I would rather release than and be done with this noose around our necks in 5-6 yrs than still trying to pay it all off decades later

milliemonster

I have just looked at your figures, 85% LTV of your house value (that's if it is worth £245k as a forced sale) is £208250, if your mortgage is already £207k, then you have no equity to release to remortgage anyway

debtiva

Hi,
thanks for that, i have been on forums most of the day, trying to find sulutions, i also got my payplan iva forms through the post today and have decided to go for an iva.

my worry was if it got rejected we would have to go bankrupt but i think that we could do a dmp if its rejected, so i am hoping its going to go threw.

yes i agree 15 dmp is a huge amount of time but we were going to do a secured loan on the house over 25 years to pay off the debt, but didnt have enough equity, just glad i have admitted defeat now and am trying to sort thing the best i can.

everyone says you need a basic bank account we just opened a nationwide flexi account with debit card etc, but i have asked not to have an overdraft, will an iva let me keep this or do i still need a basic bank account?

do you know what paper work they will ask for? i am self employed not being doing it long so no proper accounts yet, i certainly don't earn enough to warrent an accountant.

whats your story , who are you doing an iva with? and what paperwork etc have they asked for ? how long has it taken so far?

we need to sign our send a cashflow forcast for me and then thast will give them permission to talk to our creditors, someone on here have said payplan then asks for lots of paperwork, just wondered what it was, am still waiting for our ip to phone and introduce herself, well today is the first day i missed my loan payment so i expect the phone to be ringing anytime from now demanding money, i just simply have'nt got.

milliemonster

I am doing my IVA with Melanie Giles, they are absolutely fantastic, I can speak to them any time day or night, weekends included and they give a very personal service rather than it being a big corporate company. Have you had a look at www.iva.co.uk ? they have a wealth of information on there regarding IVA's and support forums, moreso than on MSE.

As long as nationwide are not associated with any of your creditors you will not have to give this account up, some accounts will close your account if you are in an IVA, I know HSBC do, even their basic account, halifax have done it to a couple of people too.

Paperwork they ask for? I am at that stage now, I have been asked for bank statements and payslips (last 3 months) council tax, child benefit and tax credit statements, creditor statements, loan agreements, pension statements, evidence of utility bills, house valuation, mortgage statement and redemption, this is all so Melanie can go through everything and formulate the proposal. We made our first call 2 weeks ago and we have a telephone meeting with Melanie on Sunday afternoon.

Our story is very simple really, just living beyond our means for a number of years and a recent job change for me has tipped us over the edge as I am earning significantly less now than I used to. IVA scares me silly, but Melanie's team have been so fantastic with their patience, support and advice that I feel much more comfortable with the whole thing.

Don't worry too much about the calls, I have stopped payments this month and was very scared to do so, I was going to offer token payments but was told to not even bother with that as it would make no difference to either the amount of calls I would get or the outcome of the IVA, Melanie's team advised me to put the money I would have paid to creditors in a contingency fund for the time being.

just remember the call centres when they call you want you to make a payment as they earn commission on whatever they persuade you to pay!, just be firm, tell them you are in difficulties, have consulted an IP who is putting a proposal together, give them your IP's details and leave it at that, don't be coerced into paying anything, the people in the call centres are not the ones who will be voting on your IVA, half of them don't even know what an IVA is

debtiva

Hi,

I looked on iva.co.uk today which helped me make up my mind.

Just hope things go ahead and i don't have baliffs round

I am hoping to hear from my ip at payplan by friday this week to give me more info, sounds like your just ahead of us with iva, can you let me know how it goes and if creditors bother you etc.

Just would like to prepare myself.

best of luck xx

milliemonster

yes of course, I don't think you will get any bailiffs round, from what I understand, most creditors don't even default you until you have missed 3 payments, they may threaten with doorstep collectors but they have no rights whatsoever to even enter your property, let alone take anything of yours, only a court appointed bailiff can do that, if you start getting any letters just contact your IP who will deal with it, I couldn't see any court even awarding a CCJ whilst you are in discussions with an IP about an IVA proposal anyway.

So far, we have had calls from Egg, Barclaycard and Cahoot, Egg have called loads of times and we have told them the situation, they want a reference number from us but our IP doesn't give reference numbers, even though we have given Egg our IP's details they have told us they can't put a hold on our account unless they have a reference number, so I offered to make one up lol!, anyway we have just told them if they keep ringing we will just ignore them, they have stopped for now.

Barclaycard ring 4 times a day but it's just an automated call, asking me to call them which I refuse to do so until they can be bothered to actually get a human being to call me, then I will speak to them and let them know the situation.

Cahoot called me last night, they were lovely, I gave them our IP's details and they are putting a hold on my account and have just asked me to call them with an update as soon as I have anything.

I have missed payments also to Santander now but they haven't contacted me yet.

So that's where we are up to, it is stressful but I am trying to remember that at least we are doing something about it.

debtiva

Oh its nice to know someone going threw it at the same time, my husband banks with santander, also has an £1800 overdraft with them and a £10,500 outstanding loan with them, so i think they may start calling soon as they won't be getting his wages into that account anymore.

Well, payplan rang today....................

i am going along with the first steps to sign and return my cash flow and my husbands payslips, then it goes to step two once the ip has gone over the cash flow.

step two will involve getting mortgage redemption statement, a letter from my father in law stating how much we owe him, statements from all the creditors, pention policy, v5 log book for car,our id and a background story about us..............omg i don't think the list ends there either!

only once we get to step two will payplan ring the creditors to say we are going for an iva, i have been told to make token £1 payment to all the creditors until the iva goes threw ( and thats only if it approved) they did say they had a 95% success rate.
If the iva get rejected we can still go for a dmp.

they have said to contact them once we start getting default notices.

I would say the only bug bear today was i was rang by the ip assistant that was not very knowledgeable and ever time i asked her a question she put me on hold while she got the answer which was very frustrating.

anyway once i get the first step forms in which will be tomorrow as i am going to drop them in myself rather than post them, we then will have a face to face meet up but due to Xmas it won't be till the new year