New member, large debt.. IVA or DMP

longtermplanner

DorisTrousers wrote: »

Payplan aren't free by the way, although they do not charge directly for DMP's, but I do wonder why the CAB have effectively sent you elsewhere? I thought they were there to help?

CAB do not run a DMP system (although the CABmoney self administered version is being increasingly used) nor are they authorised to run IVAs, so they have to refer clients elsewhere.

I am surprised though that bankruptcy was not more clearly offered by CAB as an option as Chalky doesn't have a house to protect. Bankruptcy is much quicker and more flexible than an IVA. In bankruptcy you will only have to make payments for 3 years and these can be changed if your cirucumstances change. IVAs are longer and can often not be changed. About 1 in 4 IVAs fails, leaving the debtor then with little option but to go bankrupt. If you have a house to protect you may feel it's worthwhile running this risk, but without there is little point.

If you go into an IVA it has to be with your eyes wide open and with a very realistic estimate of your costs. Otherwise we are going to be seeing you back here in 6-12 months time saying that you can't manage the IVA payments

"They suggested that my leftover of £350 is a maximum as I hadn't taken out any costs for children's clothes, (I'm a single parent with 2 children), my own living and clothes and such like." clothes and living expenses are not an extra to be tacked on, they are essentials. If you do not have a worked out budget with estimates for these, please do post that SoA! This is anonymous.

You also have to look at how your costs might change over the next 5 years. Do you have a car that will be i creasingly expensive to maintain? Will one or more of your children be leaving school so you no longer get benefits for them? Will they be going to university and not get a full grant so you will need to subsidise them? Or are they younger and they will be going to secondary school and needs to go on school trips and have mobiles etc?

debtfree2016

Hi Chalky1313, have you discussed with your creditors the situation. You could ask them to freeze the interest and take lower payments and then try and snowboard them. Taking out the smallest one first.... Best of luck.

Depth_Charge

DorisTrousers wrote: »

Whatever you decide is your choice, DC won't be recommending an IVA, so it will be DMP or BR from that standpoint. Whether that fits with you is a question only you can answer.

Payplan aren't free by the way, although they do not charge directly for DMP's, but I do wonder why the CAB have effectively sent you elsewhere? I thought they were there to help?

If they haven't allowed for costs that you have, then find someone that will.

As a general rule, BR is usually cheaper than IVA unless there are assets to protect, and IVA is usually cheaper than DMP unless you can clear the debts in a quicker time than 5 years, which is unlikely given the scenario you have posted.

IVA or BR looks to be your choice and good luck with whatever you choose to do. Speak to whoever you like, but run a mile from anyone who suggests a low contribution DMP, even a free one.

Hi DorisTrousers

Fascinating comments here, the one about me is amusing but the usual nonsense of course.

Busy now, ironically dealing with failed and failing IVAs, but I will be back on this thread... and that I am quite sure will be no surprise to you:)

Best Regards

DC

chalky1313

longtermplanner wrote: »

CAB do not run a DMP system (although the CABmoney self administered version is being increasingly used) nor are they authorised to run IVAs, so they have to refer clients elsewhere.

I am surprised though that bankruptcy was not more clearly offered by CAB as an option as Chalky doesn't have a house to protect. Bankruptcy is much quicker and more flexible than an IVA. In bankruptcy you will only have to make payments for 3 years and these can be changed if your cirucumstances change. IVAs are longer and can often not be changed. About 1 in 4 IVAs fails, leaving the debtor then with little option but to go bankrupt. If you have a house to protect you may feel it's worthwhile running this risk, but without there is little point.

If you go into an IVA it has to be with your eyes wide open and with a very realistic estimate of your costs. Otherwise we are going to be seeing you back here in 6-12 months time saying that you can't manage the IVA payments

"They suggested that my leftover of £350 is a maximum as I hadn't taken out any costs for children's clothes, (I'm a single parent with 2 children), my own living and clothes and such like." clothes and living expenses are not an extra to be tacked on, they are essentials. If you do not have a worked out budget with estimates for these, please do post that SoA! This is anonymous.

You also have to look at how your costs might change over the next 5 years. Do you have a car that will be i creasingly expensive to maintain? Will one or more of your children be leaving school so you no longer get benefits for them? Will they be going to university and not get a full grant so you will need to subsidise them? Or are they younger and they will be going to secondary school and needs to go on school trips and have mobiles etc?

Thanks, really appreciate the reply and comments. I will do the SOA now and estimate for clothes etc and post here??

My children are 11 (starting seniors in Sept) & 6, but apart from school uniform, trips etc, there shouldnt be any surprises.
I have a company car from work, so thats nothing to worry about for me.

chalky1313

Depth_Charge wrote: »

Hi

What you have put so far is not quite your SOA as such, the link below should help


DC

Household Information

Number of adults in household........... 1
Number of children in household......... 2
Number of cars owned.................... 0
Monthly Income Details

Monthly income after tax................ 1753
Partners monthly income after tax....... 0
Benefits................................ 304
Other income............................ 0
Total monthly income.................... 2057

Monthly Expense Details[/b]

Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 875
Management charge (leasehold property).. 0
Council tax............................. 102
Electricity............................. 41
Gas..................................... 41
Oil..................................... 0
Water rates............................. 12
Telephone (land line)................... 38
Mobile phone............................ 16
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 320
Clothing................................ 50
Petrol/diesel........................... 100
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 25
Medical (prescriptions, dentist etc).... 115
Pet insurance/vet bills................. 5
Buildings insurance..................... 10
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 6.1
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1809.1

Assets

Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................8814......169.......7.5
Loan...........................3068......139.......7.5
credit card....................4614......98........25.95
HMRC...........................1250......50........0
credit card....................1623......45........25.95
credit card....................4364......94........25.95
Total unsecured debts..........23733.....595.......

Monthly Budget Summary

Total monthly income.................... 2,057
Expenses (including HP & secured debts). 1,809.1
Available for debt repayments........... 247.9

Monthly UNsecured debt repayments....... 595

Amount short for making debt repayments. -347.1

Personal Balance Sheet Summary

Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -23,733
Net Assets.............................. -23,733

chalky1313

Thats kind of it really..

UpToMyNeckInIt

Question: Why have you limited your options to DMP or IVA? Why not going BR? I ask because you have no property to protect, and don't appear to own a car.

The Bankruptcy process in your case is likely to be fairly quick, giving you a 'fresh start' financially a lot sooner than the other options.

As you say, your 'surplus' does not currently include essentials that you know you are going to need, and your allowances are on the modest side of low in some cases as it is. Chances are going BR will see you discharged after 1-Year with no IPA.

Worth checking out the 'Debt Camel' website here:

http://debtcamel.co.uk/hard-choices/

Puts your options to you in layman's terms.

All the best, whatever you decide.

chalky1313

Thank you for that. The CAB didn't even talk bankruptcy.

Maybe it is am option. Would it affect my rented property or chance for property in the future though?

Thanks again

UpToMyNeckInIt

chalky1313 wrote: »

Thank you for that. The CAB didn't even talk bankruptcy.

Maybe it is am option. Would it affect my rented property or chance for property in the future though?

Thanks again

...Yes it may. (I say that based on reading anecdotal accounts on the various forums) But no more so than an IVA or a DMP I would think.

Indeed, the argument in your favour with either routes, is that rent is specifically budgeted for.

chalky1313

Thank you again for that