IVA v DRO v DMP

PRIME

Hi
I am looking to sort out my debts which stemmed from many years of been on the sick and putting head in the sand. Have been told I am eligable for DRO as on very low income but also coud get IVA coz I can afford the £150 a month if I really scrimp and save including moving into a cheaper house. (Rented). Dont mind doing this as im not a big fan of my current flat. and will probably be moving anyway

Debts are between 10k and 15k so woud take about 7-8years at £150 a month to pay back.

Just wondered looking 5-6 years into the future which is going to be looked at less unfavourably by creditors? Dont get me wrong ive no intention of applying for credit but for things like passing credit scores for moving house again eg if i get a partner/pay rise/better job generally.

Ta

PRIME

Just to add i also often get alot of overtime but this is not guaranteed so working out my income is really hard. what happens if i have a month with alot of overtime? how woud this effect each plan?

ta

Tixy

Who have you spoken to regarding your debts so far?
Have you spoken to one of the debt advice charities at all (see this link for details of the recommended charities - IMPORTANT - Where to seek professional impartial advice about your debts.

Based on the information you have posted I wouldn't have thought an IVA was the best option given your level of debt and that you are not a homowner.

PRIME

it was someone who called from a debt management company but I turned them down coz
1: they called me at home which i dislike. i felt under pressure and unprepared
2: over £1500 in fees. didnt see that being much help.

i acted interested to begin with just for an idea of what might be available but it did make me realise i need to face this all head on. (ok i already knew this and have not stopped thinking about it but it was a kick up the proverbial)

PRIME

also what counts as assets over £300?

i have a tv which was given to me which looks fancy but in todays market would probably raise all of £50.
i also have a playstation 3 (again it was given to me) and games. nearly all given as birthday and christmas pressents over the last 5 years (Ps3 is a 1st generaltion which shows how old it now is) i did sell off some of the games to make rent one month and i only dont sell more as i dont go out and it is one of my only forms of entertainment and company coz tv is rubbish. same with cd's/dvd's etc. prob only worth £2-3 each but added up.

National_Debtline

PRIME wrote: »

Hi
I am looking to sort out my debts which stemmed from many years of been on the sick and putting head in the sand. Have been told I am eligable for DRO as on very low income but also coud get IVA coz I can afford the £150 a month if I really scrimp and save including moving into a cheaper house. (Rented). Dont mind doing this as im not a big fan of my current flat. and will probably be moving anyway

Debts are between 10k and 15k so woud take about 7-8years at £150 a month to pay back.

Just wondered looking 5-6 years into the future which is going to be looked at less unfavourably by creditors? Dont get me wrong ive no intention of applying for credit but for things like passing credit scores for moving house again eg if i get a partner/pay rise/better job generally.

Ta

Hi Prime

Welcome to the forum. First of all, well done on rejecting the cold caller - at least it has got you thinking about how to best address these debts.

It would be really useful if you could post a Statement of Affairs (SoA) up here so we can see just how much you would have to "scrimp and save" as you put it. I would warn you, however, that living off a tight budget for a few months is one thing; doing so over a potential 5-year IVA is another mater altogether. It might be worth you reading our fact sheet summarising the main features of each debt option:

http://www.nationaldebtline.co.uk/england_wales/page.php?page=35_options_for_dealing_with_your_debts

and the debtcamel website has a really well-written guide to the pros and cons of each option as well:

http://debtcamel.co.uk/hard-choices/long-dmp-vs-bankruptcy/

PRIME wrote: »

Just to add i also often get alot of overtime but this is not guaranteed so working out my income is really hard. what happens if i have a month with alot of overtime? how woud this effect each plan?

ta

If you're on a DMP = it's flexible, so you could simply increase your monthly payments and/or pay lump sums off your debts, while also possibly keeping some of the extra earnings aside to budget for emergencies etc. No hard and fast rules.

If you're in an IVA = the IVA will almost certainly include a clause that requires you to declare and hand over any such extra earnings (as well as any windfalls, inheritances etc.) to the Insolvency Practitioner.

If you're in a DRO = extra earnings have the potential to derail this. If your financial circumstances improve during the 12 months of the DRO to the extent that you no longer meet the criterion regarding disposable income (this must be less than £50 per month), the DRO could be revoked, in which case the creditors can start chasing you again for their full balances and you lose your £90 DRO fee as it is non-refundable.

Regards

Dennis @NDL

National_Debtline

PRIME wrote: »

also what counts as assets over £300?

i have a tv which was given to me which looks fancy but in todays market would probably raise all of £50.
i also have a playstation 3 (again it was given to me) and games. nearly all given as birthday and christmas pressents over the last 5 years (Ps3 is a 1st generaltion which shows how old it now is) i did sell off some of the games to make rent one month and i only dont sell more as i dont go out and it is one of my only forms of entertainment and company coz tv is rubbish. same with cd's/dvd's etc. prob only worth £2-3 each but added up.

Hi again

Your questions about asset values would only matter in the context of a DRO, really. They wouldn't have any impact on the likelihood of you getting either an IVA or DMP, just to be clear.

It is simply a matter of the item's resale value. What was originally paid for it is irrelevant; all that counts is what it would fetch now. So it doesn't sound to me as if the TV is an issue.

You refer to selling some items in order to pay your rent one month. That's not an issue as the money you raised was to pay a "priority" bill.

As for PS3 and games, heaven knows I'm not a video games expert (I could reminisce about the Atari ST but this is neither the time nor the place...) but as a 2nd hand electrical item, presumably out of warranty, I don't expect it would be regarded as significantly valuable. Based on the DRO applications we process here at National Debtline, I would be surprised if the collective value of the games and hardware exceeded £300 - just how many games are we talking about, out of interest? As for CDs and DVDs, even £2-£3 each is probably an optimistic estimate of their value.

Regards

Dennis

PRIME

Where do i get a SoA?
worry with DMP as not binding and ive ignored this for so long now i cant see any of my creditors wanting to do me any favours. some ive not had contact with for almost 4 years. only one has found me and couple of the debts are more recent as not had enough to pay bills every month. and if i miss one bill or if the car needs any work (very cheap car to run but needed new tyres) debated getting rid but need to get to work. its only a banger. i just never have any left over to catch up. i budget to the penny and if i get to pay day with a zero bank balance im thrilled.
my basic income is £850 monthly.
rent 350
council 120
food about 150
car costs 80 (insurance/fuel)
internet/phone sky (bundled) about 50
mobile 25 - needed for work
electric 100ish

i need to do one shift a month overtime to break even. dont go out or anything. except coffee at a mates house. prob why my electric is so high, lol

PRIME

I have like 40 ps2 games (about £1 each, lol thanks to bootsales and games for 50p on amazon)
about 50 ps3 games. God that sounds so bad but honestly I had over 75 and these have been collected over 5 years. Some of the ones i sold were collecatbles. Got £60 for one I bought for £10 on a bootsale. Was gutted. Especially as now 10 months on I cant replace it for under £120

I have been lucky with getting things for free or cheap.

PRIME

i also have an atari but i think this is pretty worthless now, lol

National_Debtline

Hi again

Sorry, I should have posted an SoA link before:

http://www.stoozing.com/calculator/soa.php

There's also our own budget sheet template:

http://www.nationaldebtline.co.uk/personal-budget-sheet/income.php

Dennis