dmp or iva

helpwithdebts

Hi
I am new to this but i have been looking on the site for a few months. In a nutshell we have debts of over £62000 all unsecured have debated over dmp or iva spoke to paypal and they advise dmp but we can only afford to pay approximately £200 p/m this will take over 20 years to pay. They said they would look into it again and check with iva dept they got back to us and said we could go down iva route.

But in the meantime we are thinking of selling the house and renting we hope that we would have equity of approx £40000 which we would then use to pay of the debts. Not sure whether we should sign up for a iva due to the fees or just go on dmp and debts would be going down slightly until house was sold. Just want to check which option would be best in the short time as hope house would go in 6 - 9 months

Tixy

If you are planning to sell the house anyway then I would think a DMP might be a better route for you. You will save yourself the 000s in fees and will have more control and flexibility over how you use the equity from the house.

Whilst Payplan have said you could do either it might be worth a second opinion by contacting one of the debt charities IMPORTANT - Where to seek professional impartial advice about your debts.

helpwithdebts

Thanks
I think i need to see someone face to face as there are questions i need to ask which i feel dont get answered properly over the phone. Just worried as i need it sorting out as we are getting calls day and night at home, on mobile in work got to the point were i have even left the phone of the hook because cant take anymore. shouting at the kids not to answer the phone. think i just needed to discuss it with someone as only me and other oh know about the debts havent told the family. havent slepted properly in months

RAS

if you want face to face advice, you need CAB or CAP, but CAb only have a limted number of people trained as debt advisors, so you have to specify that you need one.

Perosnally, I think you would be mad to pay £6,000 in IVA fees to achieve what you could without paying that out anyway. And the IVA stays on the Insolvency Register for life, so would affect your access to a lot of credit for a very long time.

helpwithdebts

Thanks for that. Thats what i was thinking but pay plan said go with iva then when you sell house pay off the debts i mentioned fees to her but i wasnt sure if she knew what i meant.Rather just starting paying off what i owe asap.

dancingfairy

IVA's can be very useful however an IVAa is a more formal agreement and you have to stick to it for the duration whereas a dmp is a lot more flexible. Doing an IVA knowing that your cirsumtances are likely to change so dramtically is a bit mad in my opinion.
Firstly you need to decide whether you want to sell your house or not- it seems like you have decided this but you need to factor in moving expenses, equity in the house, moving costs etc etc and whether you can afford the mortgage or not. It appears that your options include staying in the house and potentially doing an IVA or perhaps selling and doing a dmp/IVA ? How much equity are you planning to free up by selling?
df

helpwithdebts

We hope to release about £40000 equity which wouldnt be enough to pay off all the debts but it would be a start. It just the thought of things dragging on for years dont know whether just want a new start.

RAS

Selling up would reduce your debt massively, how much per month would it release? What is the likely rent compared with the mortgage and associated costs?

dancingfairy

I think I would investigate rental costs then and estimate how much you will have each month to put towards the debts and work out how long it will take to clear the remaining 22k so you have something to work with. You could then look at an IVA/Bankruptcy from that point on - lots of options for you.
a) do IVA now
b) sell house and then do dmp, or an IVA (probably not much point then as either a dmp or bankruptcy would be best as no equity to protect and bankruptcy may be over quicker) or bankruptcy.
you could of course do bankruptcy now but you would need to research the house aspect and by then your credit rating would be more shot and you would find it more difficult to rent somewhere and you are likely to be better to sell your house yourself than wait for the offiical receiver in bankruptcy to deal with it.
df

helpwithdebts

Didnt really want to go down bankruptcy thats why thought of selling up and paying off what we owe but hoping that creditors might take offers as the debts are with halifax, mbna, m&s, virgin, santander but thats in the future. minds racing need to take one step at a time.