Any advice gratefully recieved on IVA/DMP

formidablelady

I am so confused. I have debts of £45000 including 2 loans, 2 overdrafts and credit cards. Currently trying to repay £1140 a month. I have been late with the last few payments and got a couple of defaults. I have no option but to do either a DMP or an IVA. One of my credit cards put me onto Kesington finance and she just gave me some figures £770 a month over 5 years with a DMP and £740 a month on an IVA. I thought the IVA figure was quite high but she says she has maxed out our allowances on food etc. Does this sound right to you? According to that we would be paying around £40200 back for an IVA of £45000. She says its because we are on high incomes. My husband earns around £2500 after tax and myself around £2200. This will go down as he is about to lose a car allowance of £400 in July. Oh the fees for the company are that they take the 1st payment and then £70 a month.

FavDaughter1

Hello, i'm quite new to all this. just had a IVA accepted on Wednesday.

the main thing i picked up in your post is FEES. DO NOT go with any company who wants up front fee's from you. the IP does get a fee but that comes out of the figure you pay each month, so there is no need for you to pay out up front fee's!

please take care who you go with, don't sign anything until you read up a bit more. someone will come along and post a link for you to check feedback for different IP'S/company's.(i'll look for it in a min for you)

A IVA is different to each person,depending if you have children&income etc but if something doesn't "feel" right, listen to that,post here and someone will be around to help you.

from what i've read a DMP is not good,creditors can still add interest& come after you at any point. but,you must read up & get some advice so you can choose what's best for you.

Foxy-Stoat_3

With a total household income of over £4500 a month, your repayments will be high, unless you rent number 14 Downing Street!

+1 about the fees, no IP should charge YOU fees, they get paid inwith the IVA.

Your supposed to work out how much it costs you to live every month excluding all the debt and what your disposable income will be. The disposal income with be paying the IVA, you shouldnt be left with anymore than £100 after bills and IVA payment each month. Thats how its supposed to work.

I had £50K of unsecured debt, went up to £60K as it took 10 months to sort the IVA out, 10 months of £900 a month interest and late payments. My repayments were £400/pm, going up and down thru the term of the IVA when my salary went up with down. Ended up paying back 27%.

By the sounds of it, you could well take out an IVA and pay into it nearly all of the debt, then the fees come out. It will effect you for a few years after the IVA finishes. Can you not restructure the loans/credit cards or generally spend less each month?

It costs me and my GF around £1600 a month without drinking or going out to get by. Our joint income is around £2000, living in the South East, not a nice part of Susssex but not the worst.

Good luck !

formidablelady

I have just been on the iva comparison website to see if there are any reviews for them but there aren't. They said the fee was the first payment I would make which sounds dogey except I was referred to them by one of my credit card providers. Can't remember which one. I also really felt as if they were trying to put me off an IVA. They said at first it would take me 12 years at £770 on a DMP or 5 years at £740 on an IVA. When i appeared to be more in favour of the IVA she said she had made a mistake and it would only take 5yrs 4mths on the DMP not 12 years. Then she said she thought I may not be accepted for an IVA.

Foxy-Stoat_3

Sounds like you should speak to someone else !

I had my IVA through Grant Thornton who seem quite good and helpful when I had quereries or worries, but who knows. I was with another IP but got transfered to GT a few years into it.

judojub

I am also with Grant Thornton and I have had no problems at all so far (still early days though)

formidablelady

Thanks for replies. Foxy-Stoat are you saying that it sounds as if either way I will be paying the roughly the same amount? It just sounds odd that it would be virtually the same. I also asked her about a car as I work as a nurse in the community and need one for my job. Mine is now 6 years old and on its last legs. She said that if I bought a car on HP (which i should get apparently as they just repossess the car if you don't pay) that car payment would be taken into consideration and reduce ny payment - which was like virtually encouraging me to buy a car. The whole thing seems very odd to me.

Foxy-Stoat_3

They are trying to make you sign up with them so they can make the fees, which they shouldnt charge. I wouldnt speak to them again.

£740 x 60 months = £44,400 i guess the interest is killing the repayments!

If your credit cards are maxed out along with your loan, then make an allowance in the monthly expenidure for upkeep and repairs. The car I had was a 15 year old 2.5 bmw, worthless, but the repairs in the monthly expenidure covered the expected repair costs.

Have you filled out a monthly expenidure form yet or do you know the costs of ALL monthlh bills? That would be a good place to start.

If its all your debt and none of your partners, then his income would be taken into account but not sure what proportion tho, as I did my IVA on my own.

formidablelady

Thats interesting. Will they let you put down an allowance for future maintainance and repairs? What would happen if you got a big bill for say if your engine blew up? I currently pay £1140 a month mostly in interest payments and hardly any coming off the debt! Nothing is left and I am scared as mortgages will rise sooner or later and want to make the right choice. At first I thought DMP was better as I was told it affected your credit score less afterwards but after a bit of research IVA seems to be the safer option.

formidablelady

Oh and the debt is joint.

Foxy-Stoat_3

If after setting up the IVA you had a major expense, then they can allow you say 1 or 2 months payment break and you make it up at the end.

You just need to keep the IP informed of any problems, they are normally helpful and on your side.