IVA/DRO advice please

spottycup

Just wondering if anyone can help with a question? I am currently on a DMP with Payplan, have paid off around 2K and balance is now down to around 13.5K. Our circumstances have changed drastically recently and I am now paying £70 less per month than I was (£40 per month is new payment). The advisor at Payplan has suggested an IVA, which they assure me, can be done for £50 per month.
Is this true? Does anyone know what the minimum monthly repayments need to be for an IVA?
I did wonder about a DRO but I dont know if all the creditors have frozen interest or not and to be perfectly honest I am, at the moment, too much of a chicken to find out.
Any advice would be welcome, thanks.

National_Debtline

Hello there,

The first thing to bear in mind is the cost. An IVA at £50 per month is going to cost you £3,000 (though this could change depending on what happens to your personal circumstances over the five or so years that the IVA will run for). A DRO will cost you £90.

Your next consideration is the time. An IVA usually lasts for five years - though some get extended to six. A DRO lasts for 12 months.

What's important to bear in mind with the DRO route is that you need to ensure that your disposable income (the money that you can offer to your creditors) remains at £50 or less for the twelve months that the DRO runs for.

Both are insolvency measures, so the effects on your credit file are similar. Your name will also appear on the insolvency register for both routes (only a little over a year for the DRO, however).

Further info on both routes:
DRO: http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=37_debt_relief_orders
IVA: http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=26_individual_voluntary_arrangements

I personally haven't ever come across an IVA with a repayment of £50 previously, that's not to say that they do not exist. Payplan will make money from you doing an IVA, they will not make any money from you doing a DRO.

Hope you find this information useful.

Best wishes,

David @ NDL.

Lucy5781

PayPlan are an approved body for processing a DRO for you (though my DMP advisor with them didn't even know that, I had to explain it to her and copy the DRO woman in on that email...) but obviously they don't get the money an IVA would provide them with and also they are then losing repayments to the creditors from you, which they would rather avoid.

Other than that, they were very helpful getting my DRO arranged, mine will complete in September.

Lxx