Advice needed please

trundles

Hi there

I am just wondering what a DMP is in comparson to an IVA I currently have debts of around £32000 I have £15000 in a seperate account from my house sale but part of me wants to keep hold of this for example put in my sisters name and get her to invest it for me. I am currently paying amounts varying between £1 and £50 to my creditors each month all interest has been frozen and according to my figures it would take about 43 years to clear my debts! They rejected a 25% IVA HFC bank wanted more so have just gone back to paying my tiny amounts! Can anyone give me any advice on what the best thing to do would be please? How long will they allow me to carry on paying such a small amount? All my creditors seems to be happy with what they are getting no letters or phone calls for months

thank you

rayday2

I am not sure what you want. Do you want to be debt free? If you do then use the £15,000 that would at least half the number of years you have to pay your debts back.

CCCS_Emily

Hello trundles,


I am just wondering what a DMP is in comparison to an IVA
A DMP is an informal arrangement where a third party distributes payments to your creditors on your behalf, and you pay all your debt. An IVA is a legally binding contract where your creditors agree to write off some of your debt and the repayment period is limited, usually to 5 years. IVAs do have specific criteria and creditors tend to reject the proposals if they are not going to get more than a certain percentage.

I currently have debts of around £32000 I have £15000 in a seperate account from my house sale
You could use this £15000 to do full and final settlements to your creditors. This is where you write to them and ask how much they would accept as full and final settlement of the debt. They will write back with an offer. If you are happy with this amount you can pay it and that debt will be gone. If you think you can reduce the amount further then you write to them offering a lower amount and begin negotiations with them. Always do full and final settlement negotiations in writing and do not pay any settlement figure until you have it in writing from the creditor that they will accept the agreed amount and not pursue you in any other way to collect the debt.

There are also ‘lump sum’ IVAs. This is where an insolvency practitioner negotiates the settlement figures on your behalf. They would charge a fee for this, so the percentage your creditors get back would be less.

Can anyone give me any advice on what the best thing to do would be please?
You don’t have to use the £15000 but you have a good opportunity here to deal with a large portion of you debt. I would suggest you look at all options before you decide. While I cannot advise you fully on your financial situation via this forum we do have an online advice facility called Debt Remedy where you can complete a financial statement and be provided with advice on the best way to deal with your situation. If you go to our website www.cccs.co.uk and click on Debt Remedy you can access our virtual counselling service.

How long will they allow me to carry on paying such a small amount?
This can go on indefinitely, but token payments are usually only a temporary solution, as it does not really deal with the debt.

Hope that answers your questions.