DMP v IVA?

moxie_2

Any words of wisdom gratefully received. I'm in a DMP with Payplan, have been for about 18 months now. They rang me today to say they have been reviewing my arrangement and feel that I would be better suited to an IVA. It means my DF date will be 5 years rather than 7 as it is currently. Also interest will be frozen (not all my creditors have done this). It seems all good, can anyone think of any drawbacks?

sandralovescats

You are more formally tied to an IVA, but you would pay off your debts faster.

There is a charge for an IVA which is around £8K. Considering that you would get 60-70% of your original debt wiped off it might be a good idea to give it some thought.

On your current level of debt you would be looking at £480 per month for 60 months @ 30p in the £ for an IVA. That will probably be a lot more than you are paying now. Can you afford this?

Why did Payplan not suggest an IVA in the first place?

moxie_2

I'm currently paying over £700 per month in my DMP. I think they did suggest it when I first contacted them, but the legality of it put me off. Now I think it might be a good idea if it brings forward the date when I'll be debt free.

CLAPTON

one important factor in an IVA is how stable your income and general circumstances are over the next five years. with a DMP, as its not legally binding you can always vary it, but with a IVA its not flexible at all.
do you have any assetts...a house ? if so they will usually want a share in year 4.

moxie_2

No I don't own a property and I sold my car last year. So no assets to speak of. My job is stable (I think - I'm a civil servant so not as stable as it used to be). My main concern is I'm not getting any younger , what if I got really ill and couldn't afford to pay the IVA any more? Would they make me bankrupt?

moxie_2

Bump! Anyone?

nickj6

hi the cost of bankruptcy is normally included in the fees at the begining, however i recently found out that the companys you owe many too will vote to decide on bankruptcy, they also however have the option off releasing you from the iva. they can then come after you for the money minus the money you've paid during the term of your iva.

sandralovescats

If you were ill temporarily you are allowed a couple of months' grace on an IVA.

However, it might be a good idea to take out an insurance plan - which would be money well spent.

I found a Company which do this and pay out £1000 per month for a premium of £30 per month. It might be worth a thought.

Will find the link and send it by pm to you.

moxie_2

I spoke to Payplan today and I'm going to stay with my DMP. It worked out that I would have to pay about another £100 per month for an IVA and I just can't afford it. I do like to go out sometimes and buy small gifts for birthdays and Xmas, but the income and expenditure information for an IVA is much tighter than for my DMP. I prefer the flexibility of a DMP although it does mean I have to keep paying for 2 years longer than I would in a IVA. I think/hope I've made the right decision.