DMP plus IVA/Bankruptcy advice

MartinW24

We've been on a DMP for about 5-6 years now.
At first we were paying nearly the full amount to the creditors (prior to going on the DMP)
About 2.5 years ago we lost one of our wages and have lived on one wage ever since.
Our disposable income didn't change as we reduced absolutely everything we could to the bare minimum.
Obviously the payments being made to the DMP switched to token payments and we have been ticking over ever since.

I enquired about switching to an IVA, but was told that we don't have enough disposable income for it to be agreed. We need about another £80.00 per month out of thin-air.

We can't save for bankruptcy as all spare money makes up the token payments to DMP.

We could stop paying them for about 3 years to save up the fees for a joint bankruptcy, but I imagine that court proceedings will be started by the creditors long before that.

Basically I'm looking for advice on the best options.

We have no equity in our property. Even if we had a little bit, after paying the fees etc we would be left with nothing and then our rent would be more than we currently pay for our mortgage.

Our DMP statement shows 99years+ for the completion date of our plan.

I know we have got our self into this situation, but there really seems like no way out and everything is starting to suffer.

All spare money has gone to the DMP since it started so no-one has had any new clothes, shoes, trainers (the kids get a few bits for their birthday & Christmas and we have to try and make that do, but it is hard. There are so many things wrong with the house that need money to sort (we have some damp - nothin bad now, but it needs sorting. Our sofa is really on it's last legs too).

1) Is there a way to go bankrupt with getting help with the fees?

2) Can an IVA be applied for and then successfully appealed when it gets turned down?

3) What are the rules in obtaining credit once you are on a DMP? I know another couple on a DMP who managed to get a store card or catalogue type of account, but just eventually added that to the DMP. I'm not saying we would be successful if we applied, but it could be a way of getting a cheap sofa while not having any cash to save up for one. The minimum monthly payments could be met out of the food budget I suppose, but what happens if that becomes a struglle? It will be another debt to add to an existing DMP when we weren't supposed to get more credit?

I really don't know what to do or where to turn.

Any/all advice is greatly appreciated.

Thanks

Pixie5740

Who is your DMP through? Have you spoken with one of the debt charities or PayPlan?

National_Debtline

Hi Martin

I recommend you call us or one of the other free debt advice charities so that you can receive full advice on your options, taking all of your circumstances into consideration.

Just to answer your questions:

1) You may be able to get help with bankruptcy fees from a charity trust fund/grant. You can check whether you would be eligible for help through Turn2us www.turn2us.org.uk/grants_search.aspx

2) If an IVA seems viable you can apply and the creditors vote on whether they accept the proposal. Creditors who represent at least 75% of your debts by value would have to agree the proposal for it to be accepted. The insolvency practitioner could put another proposal forward if it was initially declined but it would need to be a better offer. There is no appeals process.

3) As far as I’m aware most DMP agreements would have a clause to say you can’t take out more credit while the DMP is in place. If the DMP provider found out you had taken more credit you’d risk it being cancelled. It depends on the agreement for your particular plan ultimately so it would be best to check with your provider first.


James
@natdebtline

MartinW24

The DMP is with StepChange

I was told that we do not have enough surplus money for them to be able to arrange the IVA.

We currently pay a token amount for our creditors (about £40 per month), but in order for our IVA to be accepted we need to be paying about £100.00-£120.00 per month.

I know about the 75% rule, but the way it was explained to us is that we can't even put forward and IVA request unless we have a level of disposable income that we will never be able to meet.

It just doesn't seem fair. Yes I know we got ourselves into this mess, but we are trying to sort it out and it's making us ill.

I suppose the new credit stuff could come down to the fact that if they cancel our DMP because of it, we will just have to move to another DMP provider (if it comes down to it that is).

I just don't know what to do.

We only have the one wage, but I earn good enough money so we can just about survive. We just have no spare money at all each month, so can't save for anything. We have a son and daughter (7 and 2) and constantly feel like they are growing up with nothing (apart from love and attention of course). I'm not talking about spoiling them with gifts & presents either. Just the odd present would be nice. Enough clothes that fit would be nice too. It's so hard having to deny them so much when I also grew up in a very poor family. I never wanted that for my kids, yet I feel like they are being penalised for our mistakes.

I will check out the grants link in the morning.

Thanks for the info.

sourcrates

MartinW24 wrote: »

The DMP is with StepChange

I was told that we do not have enough surplus money for them to be able to arrange the IVA.

We currently pay a token amount for our creditors (about £40 per month), but in order for our IVA to be accepted we need to be paying about £100.00-£120.00 per month.

I know about the 75% rule, but the way it was explained to us is that we can't even put forward and IVA request unless we have a level of disposable income that we will never be able to meet.

It just doesn't seem fair. Yes I know we got ourselves into this mess, but we are trying to sort it out and it's making us ill.

I suppose the new credit stuff could come down to the fact that if they cancel our DMP because of it, we will just have to move to another DMP provider (if it comes down to it that is).

I just don't know what to do.

We only have the one wage, but I earn good enough money so we can just about survive. We just have no spare money at all each month, so can't save for anything. We have a son and daughter (7 and 2) and constantly feel like they are growing up with nothing (apart from love and attention of course). I'm not talking about spoiling them with gifts & presents either. Just the odd present would be nice. Enough clothes that fit would be nice too. It's so hard having to deny them so much when I also grew up in a very poor family. I never wanted that for my kids, yet I feel like they are being penalised for our mistakes.

I will check out the grants link in the morning.

Thanks for the info.

Hi,
Is there any way you can realistically cut back on your outgoings in order to up your disposable income ?
Tall order I know, but a careful look might bring up something you've missed.
Other option is increasing your income, are you claiming any/all benefits you may be entitled to ?

Maybe you could post an SOA ?

It's obvious the DMP route is no good to you, rules on Bankrupcy are changing from this October, unsure of the exact detail as yet but as ND said, you can get help with Bankrupcy fees.

You don't say how much your debt is, would a debt relief order be suitable at all ?