Considering an IVA - Please can someone answer these simple questions!

Mercyknight_2

Thanks again Foggy...

I'm actually in a bit of a dilemma now as Lloyds (with whom 90% of my debt is with) have agreed to pass all my debts (overdraft, loan, and credit card) over their collections agency which they have told me all the interest and charges will be frozen.

With my IVA I could continue to pay the debt off in just over 6 years now, especially as all creditors will have frozen interest...

I don't know whether to go for the IVA or stay with the DMP...

Decisions! Decisions!

FoggyBrain_2

Hmmmm .... if (IF) Lloyds play fair and guarantee to freeze interest and charges ( get it in writing) then a DMP might be the way to go. The term ( if all goes as Lloyds promise) will not be much longer than an IVA, the monthly payment might give you a bit more to live on ( you'll need to negotiate this before you can decide which route to take), you will certainly be less restricted and will be able to keep ALL overtime, windfalls, bonus payment, etc. However, Lloyds will, of course, be able to renege at any time.

Mercyknight_2

Haha, I'm glad you were able to decipher my last message I'm getting tired!

I'm going to speak to Lloyds again and see if I can get them to send me confirmation in writing of the freezing of charges and interest.

Has anyone ever completed a DMP successfully?

FoggyBrain_2

To be honest, most people I know of who have been in a DMP eventually convert to IVA. They usually use the DMP to provide a breathing space while they collect their thoughts. Most DMP's involve multiple creditors, some of whom don't co-operate. Then, when debts get sold on to collection agencies, negotiations have to start again with the "new" creditor and it all becomes a bit unmanagable. At least an IVA provides more certainty (not foolproof though). A lot here will depend upon the amount Lloyds will accept and how that works out regarding the term that payment produces.

Mercyknight_2

As you know I am on a DMP but I am about to start the ball rolling for an IVA, is there a chance that I can stop making my full DMP payment amount whilst setting up the IVA, just make £1 token payments and send letters to my creditors explaining that I'm in the process of setting up an IVA?

FoggyBrain_2

Hi again. I guess that course of action is no different to stopping usual loan repayments while setting up the IVA's ( gives a chance to save up a small contingency fund), which is what most of us have did at the start. Best to run it by your chosen IP, though.

Homershairdo

Mercyknight wrote: »

As you know I am on a DMP but I am about to start the ball rolling for an IVA, is there a chance that I can stop making my full DMP payment amount whilst setting up the IVA, just make £1 token payments and send letters to my creditors explaining that I'm in the process of setting up an IVA?

Good luck - in terms of token payments, I'd not bother, it makes no odds in the end. I didn't make a payment for several months in the run up to mine, and it the IVA was approved, with a relatively small dividend.

Mercyknight_2

Shall I write to all my creditors though explaining that I'm in the process of setting up an IVA?

FoggyBrain_2

Some do, some don't. I didn't write to any of mine, nor did I make token payments. However, it only took 6 weeks to set up my IVA, so they didn't have the time to really notice. At the end of the day it will make little difference to the voting, which, on the whole, is conducted by appointed accounting firms (The Insolvency Exchange, Grant Thornton, KMPG and the like) and is based on economics as opposed to case history.

Mercyknight_2

What if half way through the year I make a saving of £20 on my gas per month, will I have to pay the rest to the IVA...

For example I budgeted for £90 per month, I then speak to the gas company and say actually you can change it to £70, will the IVA company want the extra £20, if not, how do I explain it on my financial review, it might look like I lied to them...?!