What option to take?

Options
I have had a look over some of the other threads and gatherd some good info but still i am in the dark.

I have for just over a year been part of a Debt payment Plan with a company called DFH Ltd, they have been very good with me but recently i have started having my doubts.

When I first contacted them i was instructed about a DPP as my debt was around £12,000, i recieved a letter stating i would be debt free after about 3 1/2 years.

They then contacted me yesterday to offer me a chnace to reduce my payments as part of a IVA. looking into more detail they state on their site an IVA is for £15,000 or more.

How could my debt have reached that point? Is it because they are charging 17.6% fee on top of what i owe? when i called they stated my debt is higher than it was when i started?

As such i have looked around for other FREE companies like Pay plan who do not charge a % fee.

Do i contnue with my DPP with DFH or take the IVA?

or do i move my DPP to Pay plan etc?

the strange thing is my debt is still not abouve the £15,000 threshold for an IVA?

thank you for any advice

Comments

  • tracytaxi
    tracytaxi Posts: 297 Forumite
    Options
    I would consider a debt relief order or talking to step change or talk to step change first good luck x
    :T better late than never, better to laugh than cry:j
  • Depth_Charge
    Depth_Charge Posts: 970 Forumite
    First Post
    edited 7 February 2013 at 5:37PM
    Options
    I have had a look over some of the other threads and gatherd some good info but still i am in the dark.

    I have for just over a year been part of a Debt payment Plan with a company called DFH Ltd, they have been very good with me but recently i have started having my doubts.

    When I first contacted them i was instructed about a DPP as my debt was around £12,000, i recieved a letter stating i would be debt free after about 3 1/2 years.

    They then contacted me yesterday to offer me a chnace to reduce my payments as part of a IVA. looking into more detail they state on their site an IVA is for £15,000 or more.

    How could my debt have reached that point? Is it because they are charging 17.6% fee on top of what i owe? when i called they stated my debt is higher than it was when i started?

    As such i have looked around for other FREE companies like Pay plan who do not charge a % fee.

    Do i contnue with my DPP with DFH or take the IVA?

    or do i move my DPP to Pay plan etc?

    the strange thing is my debt is still not abouve the £15,000 threshold for an IVA?

    thank you for any advice

    Hi

    Looking at the figures and timescales you have quoted then it would appear that you are paying around £315 per month into the current DMP (this would take into account the 17.5% fees paid to the DMC).

    There is no excact threshhold that to enter an IVA your debts have to be more than £15000, some companies administer IVAs for less.

    I cant really understand the logic of what they are saying as if the debts will be cleared in 3.5 years in the DMP if I am reading this right (theres no guarantee that I am) so the IVA bit seems a little puzzling

    Also Interest and charges may have and still are being added by your ceditors in the plan maybe?

    Have you asked the DMC for a full breakdown of your payments and up to date creditor account balances?

    Have this DMC fully advised you on all your options etc?

    There are free debt management providers such as Payplan & stepchange where all your payments go towardsyour debts so the advantages of that are obvious and its a no brainer for me, but people have the choice who they go with.

    There is the option of self managing a debt management plan but this method certainly does not suit all.

    Nobody could sensibly advice you what solution to take without knowing your full circumstances.

    You may have other options and are there any potential PPI claims?

    Could you put up your statement of affairs including current creditor account balances? as this would help people to guide you further

    In the meantime it might be worth checking out the links to genuine charity and FREE debt management plan providers below -

    http://www.stepchange.org/Home.aspx

    http://mymoney.nedcab.org.uk/moneyadvice/ (includes online assisted self help DMP system)

    https://www.mymoneysteps.org/

    http://www.payplan.com/

    Best wishes

    PS - the approx numbers I have used could be wrong its just the way am reading it:)
  • UpToMyNeckInIt
    Options
    Hi Nemesis,

    Always difficult to advise on these things, as everyone's circumstances are different.

    If your original debt was around £12K, and you suspect it is around £15K, then this is indicative of your creditors still charging a lot of interest and / or your company taking a lot in the way of fees. (This is one of my gripes with DMP's - not a formal arrangement - creditors can, and do, move the goalposts).

    Contrary to popular belief, there is no minimum IVA debt threshold. (It's the fees charged by the provider which means that they become disproportionately high in some cases otherwise). However, I think with your level of debt (and if you are paying back around £300 pcm), an IVA is probably not a viable option.

    I believe that a DRO would only be viable if you had limited assets, and a disposable income (after all the essentials are paid for), of less than £50pcm (and assuming your debt is less than the £15K upper limit).

    Certainly, switching your DMP to one of the charity providers would be a good move though. Your plan is funded, not by a fee from you, but from donations to the charity made by the creditors.

    Good luck.
  • nemesis8100
    Options
    Depth Charge yes you are right i am paying £316pcm at present, they said with the IVA that would come down to £190PCM for a 5 year term. The way i looked at it was that the original DMP was just over 3 1/2 years so with being on it for over a year it should have been lower by a decent amount. Obviously for some reason it has not.

    I gave Pay Plan a call today and they have set me up an appointment for monday to go through all my information.

    Cheers for the replies, 100% staying away fom the IVA.
  • UpToMyNeckInIt
    Options
    Depth Charge yes you are right i am paying £316pcm at present, they said with the IVA that would come down to £190PCM for a 5 year term. The way i looked at it was that the original DMP was just over 3 1/2 years so with being on it for over a year it should have been lower by a decent amount. Obviously for some reason it has not.

    I gave Pay Plan a call today and they have set me up an appointment for monday to go through all my information.

    Cheers for the replies, 100% staying away fom the IVA.

    I agree: If you can afford the £316p/m, assuming the creditors play ball, you will be debt free in 3.5 Years vs 5-6 in an IVA (and have all the restrictions which that entails - I know!!!) - it's a no brainer.

    Let us know how you get on with PayPlan next week.

    Best of luck.
  • Depth_Charge
    Options
    Depth Charge yes you are right i am paying £316pcm at present, they said with the IVA that would come down to £190PCM for a 5 year term. The way i looked at it was that the original DMP was just over 3 1/2 years so with being on it for over a year it should have been lower by a decent amount. Obviously for some reason it has not.

    I gave Pay Plan a call today and they have set me up an appointment for monday to go through all my information.

    Cheers for the replies, 100% staying away fom the IVA.

    Hi

    Yes, OK, thanks for the reply

    Very interesting

    See how you go with Payplan, make sure you fully understand what they say.

    All the best
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