IVA or DMP?

teeach

i have debt of around 2.5k. I want to use stepchange to resolve my fiinancial issues but unsure which path to go down. IVA or a DMP? I want to get my credit rating on track as soon as possible. paying them all off in one is not an option.

can I enter in a short term IVA? will this affect me for 6 years even if i finish paying back after 1 year?

my credit rating is really poor at moment. what would be the best option?

Anaheim

Hi Teech. I think you would find it hard to get an IVA for a debt less than 10K. An IVA will remain on your record for 6 years following acceptance regardless of when it is completed. I would think that Stepchange would look to take you down the DMP route, this is probably a daft question but 2.5 k of debt is relatively low, have you approached your creditors to see if you can make an agreement with them? Have you defaulted on any payments?

teeach

yes defaulted on all. i would rather a "company" deal with them as I get irate quite easily by someone on the phone by the ones that seem to talk down/be-little you.

I'm hoping I can fill in the form on stepchange then let them take it from there. is this immoral as they dont charge and have bigger fish to fry?

it also takes it "out of my hands" I am not very good ith setting up arrangements and dates etc.. so if i could just pay one person who then divies it out it would be ideal.

Anaheim

Stepchange will look at your monthly expenditure i.e. food, bills, rent etc and then work out a budget with you and any surplus income will go to paying the debt. You then need to make sure that you stick to your budget and yes, they will handle your creditors and 'divvy' the money out to them.
It doesnt mean that your creditors will stop contacting you though, but I think that you can get help for anything like this from Stepchange, they should be able to get the interest frozen as well.
Your credit rating will be affected if you have already defaulted on payments. You need to look at getting the debts settled then work on improving your credit rating. Good luck with your decision
I think that Payplan also offer a 'free' service and no - you are not being immoral at all
I know what you mean re the talk down/be-little you - as if you dont feel rubbish already!

sourcrates

teeach wrote: »

i have debt of around 2.5k. I want to use stepchange to resolve my fiinancial issues but unsure which path to go down. IVA or a DMP? I want to get my credit rating on track as soon as possible. paying them all off in one is not an option.

can I enter in a short term IVA? will this affect me for 6 years even if i finish paying back after 1 year?

my credit rating is really poor at moment. what would be the best option?

IVA`s are for debts over £15000 chap, a debt management plan is the option you should be looking at.

National_Debtline

*Pedant alert*

We do see IVAs for <£15K now and again. Strictly speaking there is no minimum, though for anything under £10K it would be very unlikely to make good sense.

That said, sourcrates is absolutely right to dismiss IVA as an option for OP here. There are various informal ways for OP to deal with his/her creditors, whether through the charities mentioned above or on more of a DIY basis.

Regards

Dennis
@natdebtline

Depth_Charge

teeach wrote: »

i have debt of around 2.5k. I want to use stepchange to resolve my fiinancial issues but unsure which path to go down. IVA or a DMP? I want to get my credit rating on track as soon as possible. paying them all off in one is not an option.

can I enter in a short term IVA? will this affect me for 6 years even if i finish paying back after 1 year?

my credit rating is really poor at moment. what would be the best option?

Hi

As others have said an IVA is not appropriate with the level of debt you are talking about.

Another point given the level of debt here is that a number of DMP providers and referrers do seem to have entry criteria that you need to meet before they 'will take you on' so to speak, for example: minimum level of debt, creditors and disposable income (see National Debtline link below for an example of this type of DMP entry criteria)

https://www.nationaldebtline.org/EW/factsheets/Pages/29%20EW%20Debt-management%20plans%20%28DMPs%29/Default.aspx

You have the option of managing the debts yourself on an informal basis or may find that this will be suggested to you anyway.

Citizens Advice general information below on DMPs, free & other providers and DIY systems

https://nedcab.cabmoney.org.uk/remedy_4.asp

https://nedcab.cabmoney.org.uk/dmp.asp

http://www.cabmoney.org.uk/

Best to get full advice on all appropriate options / implications based on your full circumstances before deciding on anything, preferably from one of the genuine charities / free providers such as CAB, National Debtline, Payplan, Stepchange

Best Wishes

DC