Struggling on DMP, should we consider an IVA??

misterbarlow

We have just done our first full year on our DMP with cccs/stepchange, and while its good that our debt has stopped increasing and has started coming down finally, but its been a real struggle every month...

All my pay pretty much goes on all the DD payments, and then my wives goes on living costs, food, fuel, clothes, everything else, etc, which is only about £600pm, she only works p/t due to childcare issues. We have 2 kids under 7.

Try as we might we struggle to keep our food bill below £80-100 a week, yes we shop at Aldi, farmfoods etc more than the bigger ones, but its still always that much no matter how hard we try...

I have a company van but my wife needs £25-£30 a week for fuel as she works in a rural village with poor public transport links, so after food and fuel we only have usually around £100 a month for everything else, thats maintaining the car service/mot/tyres/tax, household items that may need repairing or replacing, clothes for all of us, birthdays, christmas...

The gas, leccy and water all wrote with increases lately, our car insurance went up too not long ago, we are getting spread thinner and thinner..
If/when interest rates finally go up that will screw us down even more..

Our initial debt was almost 50k and even spread over ten years our DMP payment to cccs/stepchange is just over £400pm.
Thats only £25 per month less than our mortgage.
Its like having two mortgages..


Before the DMP we were paying a lot more in minimum payments granted, but then if we overspent we at least still had the cards for emergencies, food, fuel, mot bill etc....
now if we overspend we have nothing and have to lend from family, which then means paying back at payday and starts a spiral leaving us short next month...

Over the past year no matter how hard we have budgeted, every single month something has left us not only unable to save anything towards emergencies, birthdays, christmas etc, but usually we run out of money days or even over a week before being paid again...

The car failed the MOT last July on all four tyres plus other things and the cost of the MOT itself, and it was over £400, by the time we sorted that we ran out of money over two weeks before payday!! We had to lend from my mother, and so pay her back and that left us short again the next few months..

They gave us an advisory that the front discs and entire exhaust will prob fail next year, prob about £300+ to get that done! So far we have been unable to save anything towards getting that done by July!

we have been unable to save anything for christmas so it all came from the one payday, kids presents, food etc, I get paid next on 23rd and already we only have £150 to last us THREE WEEKS for food, fuel, the lot, unless we lend from family again...

We dont want to reduce the DMP payment and extend it over more term, its still 9 years left as it is...

Would we be better off doing an IVA now our credit is wrecked anyway and our house is in negative equity just about??

My brother in law had almost as much debt as us and they went down that road a few years back, he said they only ended up paying back about £25k and they only have two years left now, still having nine to go makes it seem like an endless road!!

I dont know if we can struggle on like this for another nine years and paying less to the DMP would just turn that into 11, or 12 or 13 years etc....
We are starting to feel as depressed as when we started the DMP..

gizmo111

I think you proabably need to just make token payments to your debts for a couple o mnths whilst you catch up and assess your options.
An SOA is the usual advice so that you get advice on here,

dancingfairy

One wonders why you weren't advised on an IVA to start with? Or were you and you decided against it? Either way it does seem as though it would be an option worthwhile pursuing for you now.
Normally I'd say redo your budget and make sure it's realistic and there's more leeway in there but with a term of 9 years left it seems on the long side for a dmp anyway so extending it doesn't seem like the best option.
Why not hop over to the IVA board on here (it's a subboard of the bankruptcy board) and get some people's perspective from there?
df

madison-nyc

would it not be more relastic to lower your dmp payments for a few years until the kids are older and your other half is back in work? give you some breathing room.

we have a dmp set up a couple of months ago , debt of £31k with a realsitic payment of £131 a month , which is a mega long 20 year plan which sounds horrific but we have a 3 and 5 year old so i'm only working part time and i'm at college and *crossed fingers* at uni next year doing a nursing degree. so whilst it seems bad at the moment i'm confident we can up the payments considerably a few years down the line and hammer it down a lot quicker.

newlifeahead

Hi Misterbarlow

I have to agree with what some of the others, you may need to lower your repayments on your dmp.

I am on a dmp with Payplan. I started this plan 8 years ago when I owed just over £59k and I am only paying £130pm on my own salary with 2 young kids. The first few years ARE the hardest but it has got easier and now I am in my final year, but when I first started my plan was worked out over 39 years:eek:
I have never increased my payments to Payplan but when things got better I saved the extra myself and either used it to get something fixed or to pay a lump sum off.

Maybe you should do a Statement of Affairs and people could look at it for you.

Stewart_78

I agree. Knock those payments down. I am doing £120 a month on 40k or so. I think it's about 26 years left to go. At the mo we have young kids and things are tough but I don't expect to be doing the DMP in 26 years time. I hope to clear it way before once the youngest is in school and we can both hopefully work more hours.

No point killing yourselves now. Be totally realistic and re-do your budget. Tell your creditors what you can honestly afford and don't worry about the total for a moment.

Some would say that having a very long term DMP scedule makes it possible to get a very low full and final settlement should you ever come into a few quid.....

misterbarlow

thanks for the input...
our review was up now so spoke to them last week and redid our budget and have reduced the payment by a little for now, about £80pm...
we will see how we manage on that for time being and can always ring them again...