Iva or dmp

NickyW

I have already been in a failed IVA due to a change in financial circumstances I was unable to keep up repayments. I now have a creditors meeting through payplan for £20k worth of debt next week. I am unsure whether another iva is suitable for me - they think it is - or a DMP. I take home approximately £900 a month, recently moved in with my boyfriend due to be evicted from my home and have a 15 year old son. My only asset is my car worth approx £2,000. I am paying my sister back for this - which payplan know about. I am unsure whether to enter into another iva or go for the DMP which seems less drastic. Please help!

Tixy

A key with an IVA is your financial stability. Its not just about what you can afford now, but whether you are likely to be able to afford that for the duration of the IVA.

So I would be thinking about the likely secuity of your income etc and whether you are at high risk of another change in your financial circumstances.

You say you have £20k of debt. How much are payplan propsing you pay a month to your creditors this time?
(How much were the repayments on the failed IVA and how recently did it fail).

NickyW

Payments to payplan will be £130. My failed iva ended 18 months ago. I was in my 3rd year and for the first year it was £180, 2nd £240 and 3rd £342. I was living on my own with 3 children (2 over 18) then and in receipt of housing benefit and CTC. I then found I was in eligible for both and it stopped leaving me unable to afford the payments even tho they said they could reduce them them by a whole £50. I had been in receipt if approximately £500 so no way I could continue

National_Debtline

Hello there,

The thing to do is to consider how long each option would take you. With a surplus of £130 a DMP would take you just shy of 13 years - and this is based upon the assumption that all creditors will agree to freeze interest and charges. As such an IVA appears to be a more favourable option as it would take half the time - generally they last 5 or 6 years.

It is important to bear in mind that your creditors will have to agree to another IVA, you will need 75% by volume of them to say yes for the IVA to get off the ground. I've spoken to callers in the past that have had second IVAs agreed, so I know it's possible!

IVAs generally have more flexibility than they used to have, if you do have a temporary change in your circumstances, you will be able to request a payment break. This could be for up to six months.

It could be worth posting up your statement so we can double check your figures.

Best wishes,

David @ NDL.

fatbelly

The cost of bankruptcy would be half again if we assume an income payment agreement of £130 over 36 months.

The downsides would be possible loss of car (shame your sister doesn't still own it) and the £525 or £700 initial fees.

It wouldn't net Payplan any fees but...What did Payplan say about this option?

rizla_king

fatbelly wrote: »

It wouldn't net Payplan any fees but...What did Payplan say about this option?

I would imagine that you could have a DMP or an IVA **cough muffled voice* or go bankrupt.

NickyW

David - which statement?

And no bankruptcy hasn't been mentioned by pp

Thanks

fatbelly

NickyW wrote: »

And no bankruptcy hasn't been mentioned by pp

Then mention it

David means a statement of affairs