IVA or not IVA

FoggyBrain_2

HI. As above the key is research and more research. Melanie is an excellent IP and puts her clients first every time.

I would take issue with all this "charity organisations are free". In a DMP, yes, all your hard earned goes to the creditors ... who "donate" a portion back. With an IVA these "charities" do exactly the same as other firms and deduct a fee, agreed with the creditors. No firm, charitable or otherwise, works for nothing. If they had discovered the art of existing on thin air, they should share it. That said, I would prefer to use Payplan or CCCS for a DMP as they carry a lot of clout.

I have heard good things about Payplans IVA dealings. But, even so, speak to a couple to get a feel for them ... Payplan, maybe Melanie and one other.

If an IVA fails it will not be the IP who makes you bankrupt -- if it happens, which is unlikely, it will be the creditors.

Dorisday, I agree that, if you have no assets to protect, an IVA isn't always the best way to go ... many people I know are in that boat, yet chose IVA purely to pay back as much as possible, in an affordable way. Funnily enough, those that start out with the goal of paying as little as possible, get disheartened earlier and are more likely to fail, those who are trying to pay back as much as possible, work at it and generally succeed.

Most failures of debt solutions are down to not enough research and getting nasty surprises.

Finally, in this particular situation a DMP might well be the better solution, but it IS a gamble that the creditors are going to play ball. They can renege at any time (or not agree in the first place). The biggest bug-bear is that they tend to sell bad debts on to collection agencies, who might not agree to carry on the arrangement, so you never know quite where you are. Beatmydebt.com have a DIY DMP guide it might be worth looking at.

Best of luck with whichever route you chose.

milliemonster

Agree with Foggybrain, most reputable companies are not 'in it to make money' as you say Dorisday! at the end of the day yes they are a business, just like Payplan and CCCS, but if they don't make an IVA affordable for the debtor and it fails, then they don't get their projected dividend from the 5 year IVA either! think about it, to actually set up and propose an IVA costs a company around £1500- £2000 and the reputable ones don't charge you a penny, their fees come from your payments ONLY if the IVA is accepted, if you are then paying around £200 a month and your IVA is unaffordable and it fails after say 6 months, you have only paid in £1200 which hasn't even paid off the fees from the nominees stage let alone the supervisory stage.

In a DMP you are never protected from your creditors, they can still charge you interest, still take you to court, still get a CCJ etc and still apply defaults right up until you have paid everything off (and further trash your credit file for another 6 years), a DMP is a great solution to give you a bit of breathing space or if you only need a few years to pay everything off but not as a longer term solution.

Oh and you may like to know that Payplans fees for running an IVA are well known to be significantly higher than most other IVA companies

debtinfo

milliemonster wrote: »

Oh and you may like to know that Payplans fees for running an IVA are well known to be significantly higher than most other IVA companies

really, do you have any statistics to back that up?

one thing to consider is that charitable organisations only need to make enough money to cover there costs, whereas non charitable ones naturally have to make enough money to cover costs AND shareholder dividends or any money the owners take out

Max_Maxwell

I disagree that IVAs are only for those with something to protect. Granted, it's the best option for those with something to protect, but they shouldn't be viewed as exclusive to this situation.

Where an IVA trumps a DMP in simplistic terms is that you have made a formal and legal agreement with your creditors for a fixed term to repay only that you can afford. Assuming you don't default, the creditor cannot bankrupt you or reneg on the agreement. Keep up the payments and you're debt free in 5-6 years.

A DMP usually still requires repayment of the entire debt, and often with interest. It could take many years to repay and there is no binding obligation on the creditor to honour the agreement. They can withdraw the plan at any time leaving you with no recourse, and you're back to square one.

Surely better to see the light at the end of the tunnel, however dim it may seem at first...

trudij

What Max Maxwell said !!!