DMP or Bankruptcy?

goldenoldiegirl

I have been deliberating how to deal with my debts for months and have completed the Stepchange Debt Tool today. The recommendation from this is to take out a DMP, my surplus income came to £500 a month but realistically I just can't afford to pay that amount and I feel that £200 is a more realistic figure for me. I discussed this with the advisor, who was very nice and so helpful, and he suggested I could adjust my outgoings to reflect this.

I have around £25K of debt and paying £200/month would take about 10 years to pay off if the interest is stopped. If I was younger I would have done this but I'm 54 and worry I may be made redundant or have to retire before this time.

I feel that bankruptcy would be a more realistic option for me, I could be debt free in 3 years with an IPA but the advisor was strongly against this. I don't really know what to do, has anyone been in a similar situation that could offer any advice?

dancingfairy

My first thought was wondering why your figures were so different. You must have put the figures in that came up with the £500 surplus so I wonder why you felt this was wrong?
On paper a dmp doesn't seem like the best plan and bankruptcy would definitely be worth exploring. Obviously there is some scope within the figures for bankruptcy so as long as your figures for each expense are reasonable you should be fine.
Do you have a car?
Do you own your own home?
Is going bankrupt likely to cause any problems with your job?
Obviously having a car and owning your own home do not mean you can't go bankrupt but they are important factors that need considering (you do not necessarily loose your house in bankrupcy in case you were wondering).
Overall I'd say do lots of research into the options before deciding and trust yourself to make the right decision. You know yourself better than any computer/the person on the other end of the phone and they can only advise you.
df

goldenoldiegirl

Hi thank you for replying.

There were some things on the form that I didn't put any figure in, for example repairs/maintenance, and the advisor offered to help look at other things, so I do need to look at the outgoing figures again, I've budgeted for everyday things but I haven't thought about how to write the budget for unexpected expenses very well.

I rent my home and my car is old, I did an online valuation and it came out at £1088. I work in local government and I've read the conditions of service and there is no mention of bankruptcy.

I've been reading about the debt solution options for a few months now and I think what is making me opt for bankruptcy is reading Debt Camel's information that compares a DMP to bankruptcy, the main thing for me is that it feels like I'll be struggling forever to pay off my debts and without meaning to sound dramatic, I feel like every day is a struggle and I want to just go to sleep and not wake up. When I think that this awful situation I've got myself in to could be over in 3 years I can see that light at the end of the tunnel...

I don't take any of this lightly and I feel very disappointed in myself for getting into this situation, I haven't told any friends or family except my daughter and it's very hard not having anyone to talk to, so I really appreciate your help.

DorisTrousers

I can't say I would be overly excited at a 10 year DMP and am surprised that StepChange seem to be favouring that option. BR sounds like your quickest and cheapest option, and the only other way would be an IVA, but of course you may not fancy that either. Did StepChange discuss that option with you?

mjm3346

You certainly need to work on the figures, if the surplus is anywhere near £500 a month (£6,000 a year) and the debt "only" £25,000 you would struggle to make a cannot pay argument.

goldenoldiegirl

No Stepchange didn't mention IVA, just strongly recommended DMP.

I'm going to re-do my budget at the weekend because I really don't have £500 a month surplus, but I'll ring Stepchange again for their help.