DMP or IVA?

kmht0307

Hi All,

I have recently entered into a DMP with Barrington Cooper who do charge for their services. I was in a DMP with CCCS and Payplan, Payplan was a DMP that I have been in for quite a few years.

I did take out further credit, which I know is not strictly ethical whilst in a DMP but circumstances dicated this.

I have now combined both DMP's into one, and wondered if I would be better off in an IVA due to the level of debt that I have.

See the SOA below:

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 3
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1942.64
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 300
Total monthly income.................... 2242.64
Monthly Expense Details
Mortgage................................ 390.6
Secured/HP loan repayments.............. 374.1
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 148
Electricity............................. 45
Gas..................................... 45
Oil..................................... 0
Water rates............................. 51
Telephone (land line)................... 17
Mobile phone............................ 36
TV Licence.............................. 12
Satellite/Cable TV...................... 34
Internet Services....................... 7.5
Groceries etc. ......................... 300
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 21
Car Insurance........................... 70
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 237
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 21
Pet insurance/vet bills................. 0
Buildings insurance..................... 19
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 32
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 50
Total monthly expenses.................. 2025.2

Assets
Cash.................................... 0
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 9000
Other assets............................ 0
Total Assets............................ 219000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 110000...(390.6)....2.99
Secured Debt.................. 25000....(374.1)....13.6
Total secured & HP debts...... 135000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................7734......0.........0
Credit card....................3032......0.........0
Credit card....................2535......0.........0
Overdraft......................1994......0.........0
Credit card....................1868......0.........0
Payday Loan....................960.......0.........0
Payday Loan....................524.......0.........0
Payday Loan....................356.......0.........0
Payday Loan....................1612......0.........0
Payday Loan....................212.......0.........0
Credit card....................490.......0.........0
Credit card....................3578......0.........0
Credit card....................3332......0.........0
Credit card....................1617......0.........0
Personal Loan..................16036.....0.........0
Storecard......................667.......0.........0
Credit card....................1599......0.........0
Total unsecured debts..........48146.....0.........-

Monthly Budget Summary
Total monthly income.................... 2,242.64
Expenses (including HP & secured debts). 2,025.2
Available for debt repayments........... 217.44
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 217.44
Personal Balance Sheet Summary
Total assets (things you own)........... 219,000
Total HP & Secured debt................. -135,000
Total Unsecured debt.................... -48,146
Net Assets.............................. 35,854

The £300 contribution in Income is from my father-in-law who lives with us and is on a pension.

We are a struggling household, as my partner does not currently work and has suffered with illnesses for a few years on and off but now feels well enough to get a part time job, but this is hard to find in the current climate. We are managing to pay the essential bills but there is very little left, the DMP is costing £220 per month, as I felt that this was an amount that was reasonable for the level of debt although it does leave us with zero at the end of the month.

Any advice would be greatly appreciated....

Tixy

Well as your DMP would be predicted to last 18years even if you were not paying a fee to the DMP provider I would certainly have a rethink. Presumably as you are paying a fee its more like 23years or so?

But I would guess that you might struggle to get an IVA accepted based on the amount you can afford to repay and the level of debt you have.

You say you have used CCCS before - did they stop your DMP when you took out further credit? or did you switch to Payplan from them?

Did you go with the fee charging DMP provider because you had broken the terms of the DMP with Payplan? did they refuse to deal with you or did you decide to move away without seeing if they would allow you to add on the additional debts?

I would certainly discuss your options with a charity - perhaps CAB or national debtline if you don't want to go back to CCCS. And I wouldn't rule any option out.

Time_to_face_the_music

With the equity you have in your property, you need to speak to an IVA expert before considering entering into anything.

Are all your unsecured debts really interest free or is that an error in your SOA?

Are you sure that paying for a DMP is really your only option? If CCCS and/or Payplan have discontinued your DMP due to you taking on additional debt, could you not consider doing a self administered DMP? The money that you are paying Barrington Cooper could be going towards paying your debts, instead of lining their pockets.

kmht0307

To answer both posts:

Payplan DMP came first, then CCCS which ran alongside it, neither party knowing about the other.

I decided to move to a fee based agent as I had advice from another posting related to DMP that Payplan and CCCS get their funding from creditors and do not strictly get the best arrangments with creditors as a fee based agent would.

I currently pay £220 per month and the fee that comes out of that is £32 per month so not huge but take your point that this could go to creditors.

Not sure about the IVA, as a friend of mine has an IVA agreement and pays less than I do currently per month and for the same level of debt.

I did try a self administered DMP but creditors were not that willing to work with me on that, and it took an awful lot of time that I don't have.

Yes the unsecured debt does have an interest element but I'm not sure exactly how much so left it blank, and most of it is in a DMP so in theory some could be frozen

Tixy

They are partly funded by the credit industry - but they certainly act in your interests and help you work out how much you can afford per month (which is done on agreed guidelines).

CCCS are a charity and will certainly offer you free impartial advice better than you would get from any commercial DMP company. With a commercial company the amount they are paid is linked to how long you are in debt for - in effect its in their interest to keep you in debt longer.

With an IVA your creditors have to agree to the proposal at a creditors meeting - and they will consider how much they are likely to get back from you (remembering that your house equity could be at risk) and whether that is the best option overall. If they think it is not they won't agree to it.
I wouldn't compare it to a friend's situation as their position may well be quite different to yours - e.g they may not be homeowners, they may or may not have equity in the house, they may be a different age and have a different income level, all of which would be taken into account.

If you did decide to consider an IVA - and if you are advised that it might stand a chance of being accepted I would talk to various IPs, not just those linked to charities before choosing who to use.

kmht0307

Thanks for the advice, there are so many conflicting opinions out there that the whole thing is confusing.

I felt that both CCCS and Payplan were not really doing anything to hold off interest on any agreements, so I decided to go to a commercial agent instead. Time will tell, but again if it doesn't work out then I will seek other options.

I have tried the re-mortgage route, but as one of the agreements has missed payments on it (Santander loan), nobody would lend so had no choice but to consolidate everything into one DMP otherwise I would have released equity and paid off what I could and leave the residual in a DMP.