Grrr payplan! Hooray stepchange!

cmcavon

We've had a nightmare couple of weeks with the realisation that we aren't going to be able to afford to pay off the £20,000 we owe on credit cards and loans.

I'm self-employed and my income has recently dropped so we wouldn't be able to meet minimum payments from August. I'm also pregnant (early days) and not feeling well so it's been horrendous.

Spoke to payplan who recommended an IVA, she pretty much sold it to me on the phone. Got all the paperwork for step one on Tuesday and today was the day for filling it in and returning it.

I had a huge wobble at the last minute and rang stepchange. They say that due to our assets being more than we owe (a house we rent out), an IVA would never be approved! There's about £24k equity so after selling fees etc and months of no income from it whilst it was on the market it's not really an option.

Stepchange recommended the DMP and I felt so much better after talking to them. We hope to increase payments next year after baby's born and get it cleared ASAP.

Hoping we are going down the right path now.

sourcrates

IVA`s are very lucrative sources of income for Insolvency Practitioners, that is maybe why it was pushed at you so strongly.
They can be good for some people, but the equity issue would indeed affect you, you did the right thing is getting a second opinion.:T

purdyoaten

Interesting from payplan - seems to be a recurring theme.

https://forums.moneysavingexpert.com/discussion/5018211

funkypriest

Stepchange was the best thing I ever did. The relief of just talking to someone who wasn't judgemental and listened to you. Best of luck!

Milz

I tried Payplan years ago and they suggested an IVA then to me, but because of my job it is something I can't do.

antonic

They tried it with me - I said no and completed my DMP with them in June 2013.

Deep_In_Debt

Payplan tried the hard sell IVA with me too years ago and wouldn't entertain a DMP when I'd done my research and knew that a DMP was more suitable for me. I went for a DMP with Stepchange (CCCS are they were then) in the end and so glad I did.

cmcavon

Stepchange were confused as to why payplan would suggest an IVA when on paper we are solvent so an IVA would never be accepted. The man at stepchange said as far as he was aware payplan were a not for profit organisation so they wouldn't earn anything from an IVA but I'm sure I've read differently somewhere.

sourcrates

cmcavon wrote: »

Stepchange were confused as to why payplan would suggest an IVA when on paper we are solvent so an IVA would never be accepted. The man at stepchange said as far as he was aware payplan were a not for profit organisation so they wouldn't earn anything from an IVA but I'm sure I've read differently somewhere.

Just as an example of how much money an IP can make from the average IVA, this is the average distribution of funds in the IVA I had :


Total debt - £54,000
IVA term - 6 years
Total repaid - £16,666
Amount repaid to creditors - £6900
IP`s fees - £8990
rest went in other charges, VAT etc


I had a change of circumstance in year 5, so didn't finish the full term, but had payments to date accepted as full and final settlement.
The IP got more back than the creditors !!!!!!!:eek: