IVA vs DMP.....Please help Im going demented!

scared-sick

I know no-one will ever tell me what I should do....but I really wish they would! I feel like I am going crazy with all sorts going on in my head. I cant seem to make a decision.

Here is my story and any comments would be welcome.

I started a DMP with Stepchange earlier this year, DMP-£400 = DFD 8 years time......Great. Then couple of months in and a change in my tax credits means DMP-£200 = DFD 16 years.....not so great. Now a reduction in hours at work means DMP-£120 and DFD 22YEARS!!!! OMG is an understatement.

Now here is the dilema. 22 years is pretty unrealistic I would say, however, I have worked out that regardless of what happens I should always be able to pay the £120. I am not expecting any increase to be possible unless I win the lotto!

I looked into an IVA and the light at the end of the tunnel bit i.e 5/6 years, is the most appealing bit. In order for it not to fail I would need to have the IVA amount the same as the DMP amount. However, everytime I look into it, I read something else that makes me think NO!....This time I have read that people have started off with a realistic and affordable amount but x amount of years into it their IP has said they can afford more and this has made people struggle.

So when I first started down this debt free path, the DMP was the right way for me to go. Now things have changed and 22 years seems like an awfully long time. But with an IVA it is so official and final that if I mess it up, I could be in all kinds of trouble. And if I start it off and some IP decides I can afford more when I cant, then what. It obviously is so much worse as I would have to declare it on certain forms, it could potentially affect jobs in the future, could affect mortgage applications if I ever want to move.......but 6 years and a clean slate!!!

I keep thinking I have decided what I should do then I think again.....someone please help!!!

theoretica

scared-sick wrote: »

So when I first started down this debt free path, the DMP was the right way for me to go. Now things have changed and 22 years seems like an awfully long time.

I think a key here is 'things have changed'. Things are bound to change again, hopefully for the better. Very few people have a work situation which stays unchanged for 22 years. With a DMP your debt free day target will move back and forth - you trade the uncertainty of a DMP with the inflexibility of an IVA.

rising_from_the_ashes

theoretica wrote: »

I think a key here is 'things have changed'. Things are bound to change again, hopefully for the better. Very few people have a work situation which stays unchanged for 22 years. With a DMP your debt free day target will move back and forth - you trade the uncertainty of a DMP with the inflexibility of an IVA.

Can't put it any better than that!:)

scared-sick

theoretica wrote: »

I think a key here is 'things have changed'. Things are bound to change again, hopefully for the better. Very few people have a work situation which stays unchanged for 22 years. With a DMP your debt free day target will move back and forth - you trade the uncertainty of a DMP with the inflexibility of an IVA.

Hi and thanks for the reply.

I think this is partly what worries me in the fact that things do change and what I dont want to do is be on the DMP for a couple of years and THEN decide I would be better off with an IVA. That would mean I have 'wasted' 2 years when I could be 2 years nearer the end of an IVA.
Also 22 years is if creditors all stop interest which half of them havent done, so it could be longer.

I know what you are saying, that my wages could go up etc, but unless it was by a lot, then I dont think it would make much of a significant difference to the DFD.

RAS

Hi

I doubt an IVA is an option at the moment

1. You need a minimum of £150 per month, I believe.
2. The creditors need to agree to your proposal and my estimate is that you would only be offering £7500 ish over the five years. Since IVA fees can be £6000, I doubt the creditorsa would agree to relieve you of your liability in exchange for £1500 or a bit more.

What may well work is that after a period of reduced payments some of the creditors are prepared to accept relatively low full and finals. When the browm stuff hit the fan, people here were offered them as low as 5%, although 25-30 percent is more usual.

scared-sick

RAS wrote: »

Hi

I doubt an IVA is an option at the moment

1. You need a minimum of £150 per month, I believe.
2. The creditors need to agree to your proposal and my estimate is that you would only be offering £7500 ish over the five years. Since IVA fees can be £6000, I doubt the creditorsa would agree to relieve you of your liability in exchange for £1500 or a bit more.

What may well work is that after a period of reduced payments some of the creditors are prepared to accept relatively low full and finals. When the browm stuff hit the fan, people here were offered them as low as 5%, although 25-30 percent is more usual.

Hi,

Sorry but I have to disagree with both of your points Im afraid. £150 is not a minimum for an IVA and the fees are a percentage of the IVA 'pot' not a set amount. I dont know where you have got your information from but I am sure it is incorrect.

However, your comments about full and finals sound promising. I have looked into this also and could hopefully reduce the amount of creditors by doing this, thereby paying the remaining ones a bit more and hopefully reducing the DFD.

This is one of the reasons I am undecided what to do as the DMP is certainly more flexible.

Max_Maxwell

Are you posting on the IVA & DRO board as well? It's confusing if you have two posts going on in separate places.

scared-sick

Max_Maxwell wrote: »

Are you posting on the IVA & DRO board as well? It's confusing if you have two posts going on in separate places.

Yes I did post on both boards and I am sorry if it is confusing.

I thought if I just post on IVA board then predominantly I expected I would get responses and advice in favour of IVA so I thought if I post on both, then I would get both sides of the arguement so to speak. Strange enough, the IVA board seems more for IVA where as the DFW board seems to be more for DMP!! But each comment helps in some way.

Also thought people on DFW board may not visit IVA board as some people only look at things relevant to themselves and I wanted peoples views from all perspectives.

I hope I am not doing anything wrong, I just need all the help I can get....sorry.