Can't decide - DMP or IVA???

Knotty29

Hi all,

I'm fairly new here and taking steps to sort myself out. I owe just under £34k and have been struggling to pay for a while now. As a result I have a CCj and a number of defaults on cc's.

I'm trying to decide whether a DMP or an IVA is the best way to go. Would i be accepted for a DMP even though I have a CCj and defaults??

My gut is telling me that maybe DMP is the best way to go as OH and I would like kids one day and if I was on an IVA and fell pregnant my income would fall and they aren't flexible in this respect. Am I right in thinking that I could change my payments on a DMP is my income falls and then increase it again once my wages go back up??

How long does it take to set up a DMP? How likely is it that interest will be frozen??

Sorry for so many questions, I'm just totally overwhelmed with the enormity of the problem.

rayday2

All of my debts have had frozen interest I do my own DMP but use the payment calculator and letters off the National Debthelpline Website.

I have no idea about IVA's from what I read they seem quite complicated but then again its all over in a relatively short time. At last payment review on my DMP I had to offer reduced payments on my DMP and explained to them it was rising interest rates, again this was accepted.

Maybe you should ring either National Debthelpline or CCCS and talk it through with them to decide which is the best avenue for you. I would think that the CCJ's only prove how much you are struggling but I have never had one so am not sure.

Crown

Hi, and welcome,

Having a CCJ doesnt effect a DMP in the slightest. With a DMP your credit record will be damaged for 6 years and then any defaults will drop off and you can start to rebuild your credit history if you so wish. If you go the IVA Route you will be debt free within 5 years but have the record of the IVA on your credit record for good and will have to be declared if appying for a mortgage ect.

It really depends on your circumstances and your income/outgoings. If you can afford to make some type of regular payment it could well be worth going the DMP route. If you havent already done so post up yout SOA and lwt us see if we can offer any advice

Knotty29

Thank you for your reply.

How easy is it to set up your own DMP?

I've just done my budget sheet and my income is £1972, my outgoings are £1420 (without any repayments for loans etc). That leaves me with £552. How much would I have to offer? I don't want to offer the full amount left as that will leave me with nothing as a contingency every month - although I suupose I should build that into my outgoings?

I have 9 debts with 6 creditors.

Knotty29

I forgot to add that I have to pay £50 a month for the CCJ. Can this be decreased for the DMP or am I stuck paying that for the duration of the CCJ?

rayday2

I think the CCJ will be classed as a priority debt as it is now law so that will come out of your expenditure take if off the £552 then pay the rest.

Have you looked on the national debt helpline website because on there you can download the information pack and the payments calculator you don't have to work anything out yourself its all very easy.

First rule is to make sure you have a bank account with no one you owe money too.

I sent letters requesting a balance (again template letter is on there website) which gave me a months grace in this time I did not pay them so had some money to live off.

Crown

Can you post up your SOA so we have a better idea?

How much are the minimum payments on the accounts. if they would reduced payments and freeze the interestr for 6 months would you be in a position to clear any of them?

It took me around 4 months to set up my DMP as originally the CCCS couldnt help me as I was overspending by £64 a month. after some serious Budgeting and DFW help plus a part time job I am now able to make token payments to the creditors. Without details its hard to say

Dr_Payback

Knotty

I took out an IVA app. 12 years ago and can tell you that it does not impact on your ability to get mortgages, credit cars and loans. I got the full set a short time after I had paid off the IVA. I would be inclined to go the IVA route as you can claim for all reasonable living expenses and you do get complete closure. Make sure you shop around to get the Insolvency Practionioner that suits you. Some of them can be gits and you need to get someone who is going to be on your side and fight your corner. If you do take the IVA route try and line up a lump sum a year or so down the road as they will bite your arm off for an early settlement figure. I know that that is easier said than done but if you can manage it they will take app. 60% of the IVA debt repayment amount i.e. if you owe £30k and the IVA settlement is agreed at £7,500 over 5 years, after year 1 you only owe £6,000 and may get away with an offer of app. £3,600. I hope this helps.

Knotty29

Thanks for all the advice.

I'll try and put together a SOA but I need to find out exactly how long there is on the loans and what the cc apr's and requested payments are.

I've also just got of the phone to Payplan (saw them mentioned a number of threads on here - never heard of them before) and they were very helpful. I've had an initial consultation and their advisor is going to call me back on monday to take the account numbers etc and advise me whats good for me.

My only concern with the IVA is that OH and I would like a baby at some point (not for a couple of years though). Obvioulsy, while being on maternity leave my income will drop and I don't know if I'll struggle paying the mortgage and the IVA on a reduced wage. I don't know whether they would be flexible enough to re-work the IVA so that the payments can drop at that time.

For those of you on an IVA, how much do you pay and how much of your debt is that covering? Someone told me I would have to pay approx £460. This wasn't a professional though, just someone I know.

Storm

The one thing to remember with an IVA is that if your circumstances mean you can't make the payments the next step is bankrupcy - which if you have equity in your home etc could mean an enforced sale. I don't want to scare you, but the current raft of advertising for IVAs has made some people think they're an easy way out.

Get some independant advice from places like the CCCS, CAB, National Debtline etc before making any firm decision.

rayday2

Storm raises a good point especially when you take into consideration rising interest rates on mortgages.