Trying to decide IVA or DMP?

debt3pls

Since taking out our loan, we have had children and lost my main income. We were just managing to meet our repayments with my husbands overtime. This has now been scrapped completely and we are now another £500-£800 a month short and can not afford to pay our loan and feed our children . Repayments are £437 (aprox £25,000 outstanding). There is also another £3000 on a credit card. We spoke to Lloyds TSB who we have the loan with and went through finances. They referred us to PayPlan who we spoke to today. We can only afford £100 a month now and they have advised us that with this payment it would take us 20-30 years to pay off with a dmp. In a few years the chidren will be at school and I will be able to work again (my husband does shift work varying week to week and the cost of childcare make it almost impossible for me to work now). So we could make higher payments and the time would be shorter. They have suggested we look at an IVA so that we are debt free in 5 years and off our credit report in 6 years and think we have a 97% chance of achieving this. It will be in just my husbands name as the debt is in his name. This does sound like the better option for us but I am concerned I am missing something? I know his name will appear on the insolvency register - but this is removed 3 months after the plan is complete? And the credit report is clear after 6 years? Will anyone know he's had an IVA after this time? What about mortgage applications in 7-8 years time? We have a home but there is no equity in it and not likely to be in the next 5 years. Any advise would be appreciated. I feel awful about having debt written off.....:mad:

milliemonster

An IVA based on contributions of £100 is feasible but you will need to access a company that will propose on that low dividend, payplan won't, clear debt are a reputable company who you should speak to who will propose on £100.

Yes an entry will appear on the insolvency register and it is removed following completion, the entry will also drop off his credit file 6 years after the start date. Individual creditors can hold their own internal files sometimes so yours may still have records after this time regarding the IVA. Regarding mortgage applications, nobody knows what the market will be like then but if you are asked on application (which most lenders do) if you have ever been bankrupt or been in a formal agreement with creditors you have to answer yes. Getting a mortgage post IVA is currently not impossible but you need a good deposit and will have to accept higher APR for a while.

You need to speak to a few companies to get some independent advice on all your options and how each one will affect you moving forward so you can make an informed decision about what is best for your own circumstances

debtfreenewbie

Talk to a few different companies and mkake sure they are not charging you.Good luck and I hope you get it sorted, ive just started mine so not an expert.Take care

GD2_2

All companies charge for IVA's, but the good ones will not ask for anything up front, so the only way they get paid is your your IVA is approved. At least that they you lose nothing if it is rejected.

Avoid anyone that asks for payment prior to creditors meeting.

Anondebtadvisor

Thats right all IVAs will incur charges regardless of who you use, as GD2 says avoid the ones who charge you upfront fees or introducers who charge a fee for giving your IVA to a firm of IPs.

Go to a firm of insolvency practitioners directly

debt3pls

Thanks for your replies. After further discussion with Payplan, it looks like the IVA in my husbands name is the best option for us. Payplan are taking on the IVA unless I am mistaken on a self employed basis as we let out our house (no equity)? Do any of you know if this will affect our insurance and if so what type? Car insurance is in my name with husband as an additional driver. We have life insurance, landlord insurance is in my name only but husband is joint owner. Contents is just my name I believe although with Tesco's who hubby has a credit card going into IVA.

I am also wondering if I am able to work when our children get nursery grants, do we have to declare this? I have a seperate account where my money could be paid into and wondering if there is any way they can know about it?

Thanks for all your help, it's a scary time :-(