IVA v DRO v DMP

PRIME

as far as scrimping goes i could move nearer to work and get rid of the car maybe.

National_Debtline

PRIME wrote: »

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) don't forget car tax, MOT, servicing!
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

Based on the above I would say DRO appears to be your best bet, but let's see your SoA once it's filled in and we will advise further.

Dennis

PRIME

will work on it tonight and post tomorrow
thanks

UpToMyNeckInIt

Hi Prime,

Firstly, as others have said - do your research before committing yourself to either option.

Worth a chat with your local CAB office first and foremost.

Now, I must stress that I mean no offence with the following statements, and that they are purely my opinion, based only on the limited available information:

Unless you can realistically repay your debt within 6-7 Years, avoid the DMP: Yes, it's flexible - as much for your creditors as it is for you. There is no guarantee that creditors will freeze interest - and certainly not for the 9-10 years (based on your approximate £150pcm affordability), that yours would last for.

Don't be surprised if the debt charities say this is your 'best' option though (they tried suggesting a 15-20 year plan as being best for me!). These 'charities' are significantly/wholly funded by your creditors (don't believe me? ...check out their websites), and a DMP of course, guarantees their sponsors a 100% return. The creditors reward the charities with typically an 11% commission or 'donation'. Ask yourself therefore: whose interests are the charities looking out for? Yours? ...or those of your creditors? I'd say the latter, based purely on my experience.

saying that, the IVA is probably not the best option for you either to be honest. They are great if you have significant assets (eg: a house/expensive car etc) that you want to protect etc. But in you case, factoring your debt level, declared assets etc. the DRO might be worth looking into, or even full bankruptcy (sounds like you are 'marginal' for eligibility of a DRO, but providing a full SoA will assist). Another link for the 'Debt Camel' website is worth a look:

http://debtcamel.co.uk/hard-choices/iva-vs-bankrutcy/

You ask the question about which solution will be 'looked at less unfavourably by creditors' in the future - Well here is your answer:

With a DMP, you repay 100% of your debt + a chunk of interest. Your reward? Your credit file is restored 6-years AFTER your final payment, ie: in 15-16 years in your case.

With formal insolvency (BR/DRO/IVA) on the other hand, your file is restored after only 6 years from the START of either insolvency solution, and a huge chunk of your debt is written off in the process.

In your situation, (as nuts as it may sound to some to go insolvent over what some may see as a relatively small debt), I know what I'd choose. Truth is, and as perverse as this sounds, I've never been so well-off since being insolvent!!!

Remember: 3-years into a DMP, you would only be regretting not going insolvent instead. (Even going fully BR with an IPA, it is sorted after 3 Years. Heck even the IVA is done in 5). Whatever you decide to do - all the best.

Depth_Charge

PRIME wrote: »

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)

Hi

Just following on from others -

Cold calling says it all, probably best not to listen to any sales rubbish (if this was the case)

Carefully check out all your options and work out what is best for you.

Affordability and sustainability are important depending on what you decide

In my opinion you do not appear to have much in the way of DI from where I am standing.

A genuine fresh start by clearing the lot might be the way however it has to be your decision at the end of the day

If you decide on the DMP route either temporary or long term, then going with a free provider is a no brainer in my opinion (assuming that you are deemed to meet any applicable eligibility criteria).

There is the option of self administering a DMP using the free CAB online system (see links below)

http://mymoney.nedcab.org.uk/moneyadvice/dmp.asp

http://mymoney.nedcab.org.uk/moneyadvice/dmptour.asp (example plan)

There are other template DMP self help resources around


PS - Have you any potential PPI claims / issues? if so then this may have a bearing on your options and solutions.

Best Wishes

PRIME

Enter your income details Amount (£)
Monthly Income (after tax) 900 + overtime if available
Partner's Monthly Income
Benefits
Other Income (e.g. maintenance payments)

Enter your monthly expenditure Amount (£)
Mortgage payment (from secured debt table below)
Secured/HP loans (from secured debt table below)
Rent 400
Management Charge (e.g. on leasehold property)
Council Tax 85
Electricity 100
Gas
Oil
Water Rates 45
Telephone (land line) 13
Mobile Phone 25
TV Licence 15
Satellite/Cable TV 20
Internet Services 10
Groceries etc. 200
Clothing
Petrol/Diesel 50
Road Tax (car) 5
Car Insurance (including breakdown cover) 35
Car Maintenance (including MOT) 15
Car Parking
Other Travel
Childcare/Nursery
Other child related expenses
Medical (prescriptions, dentists, opticians etc.)
Pet Insurance/Vet bills 20
Building Insurance
Contents Insurance 12
Life Assurance
Other Insurance
Presents (birthday, christmas etc.)
Haircuts
Entertainment
Holiday
Household Emergency Fund (e.g. for repairs)


Enter SECURED debts and Hire Purchase (HP) debts

Enter ALL your mortgage, secured and HP debt details here. Debt description Debt (£) Monthly payment (£) Annual Rate (%)
Mortgage
Secured debt
Hire Purchase (HP)


Enter your UNsecured Debts e.g. credit cards Debt description Debt (£) Min Pay (£) Annual Rate (%)


Dont know interest rates etc. Most now with debt collection companies
Total about 12000. need to get copy if credit record. cant afford that until pay day tho.

Enter the value of your assets Asset Value (£)
Cash
House value (gross)
Shares & bonds
Car(s)
Other assets (e.g. endowments, jewellery)

Additional Information

Optional information, but very useful for anyone reviewing your SOA. Number of adults in household 1
Number of children in household 0
Number of cars owned 1

Main functions...

Hairdressing, presents and holidays, ha ha you having a laugh? had my hair cut once in 3 years cos my family paid for it. woud love to spend 35 to have my hair done every 2 months i dont even like taking time off work and staying home for a holiday cos it means i dont get paid any overtime for that week

PRIME

UpToMyNeckInIt wrote: »

With a DMP, you repay 100% of your debt + a chunk of interest. Your reward? Your credit file is restored 6-years AFTER your final payment, ie: in 15-16 years in your case.

With formal insolvency (BR/DRO/IVA) on the other hand, your file is restored after only 6 years from the START of either insolvency solution, and a huge chunk of your debt is written off in the process.

Remember: 3-years into a DMP, you would only be regretting not going insolvent instead. (Even going fully BR with an IPA, it is sorted after 3 Years. Heck even the IVA is done in 5). Whatever you decide to do - all the best.

This is what i was wondering the most. might just have to not do all the overtime killing myself to make ends meet for the 1st year. work gonna love losing their yes girl, hahaha

PRIME

Depth Charge : My DI comes from overtime. 1 shift a month and i break even for the month. (I do 12 hour shifts). 1 month of no overtime and im back in the poo

National_Debtline

PRIME wrote: »

Depth Charge : My DI comes from overtime. 1 shift a month and i break even for the month. (I do 12 hour shifts). 1 month of no overtime and im back in the poo

How much is your car worth?

Have you considered the Debt Relief Order route in any more detail? I appreciate that you can do overtime, is it guaranteed? Is working long hours something that you would be happy to do?

Best wishes,

David @ NDL.

PRIME

My car I bought last year for just over £1000 I got it cos i needed something more reliable. (another loan I have paid off now from bank of mum and dad) I dont know the blue book value but i doubt it is worth more than £900 or so now as i have added a nice couple of thousand miles to the clock since