DMP, IVA or Bankrupcy

hmczippy

OK, so I've been on a debt management plan for 1 year paying £110 a month. I currently have debts of around £15,000. I've had a review today and it has been agreed that I will continue to pay £110 a month until my next annual review. I was offered the chance to take out an IVA which I am very skeptical about. I rent privately (£1282 a a month) and don't own a car. Should I take out an IVA? It's going to take me about 16 years to pay this debt back on this current DMP. My credit rating is already shot to pieces. Any advice?

Pixie5740

16 years with a DMP or 6 years with an IVA....which would you prefer? Who has recommended the IVA to you? Is your DMP through one of the debt charities?

hmczippy

It's Debt Management Company called Debt Support Service. I'm very tempted to take the IVA I have to admit. I'm sick to my back teeth of having this debt hanging over my head. I've had this debt for around 10 years already and up until last year was paying around £300-£400 on minimum payments!! I eventually would like to be in a position to get a mortgage. It's very frustrating.

Grumpelstiltskin

How much are you paying these vultures each month for your plan?

Quit them now and contact one of the debt charities.

National_Debtline

Hi there,


A few key things to remember with IVA's. They are a legal form of insolvency so will cause more damage to your credit file for the 6 years that is appears and may be something you have to declare even once it is off your file (if asked on a credit application).


There are a lot of IVA companies, and it is always a good idea to shop around. Try and choose one that follows the IVA protocol which is a set of good practice guidelines for the company to follow. For instance, IVA's are quite inflexible by nature, so if you start to struggle they are not normally amendable. However, if the company follows the IVA protocol they can vary the payments by up to 15% without a new creditors meeting.


Please be aware that your current DMP (at £110pcm) should actually take approx. 11.5years to clear - not 16years - as long as there is no monthly fee and all the interest and charges are frozen. If this isn't happening then an alternative is to switch to a free DMP and also consider looking for cheaper accommodation, short term, and putting the excess money into a DMP. To help put this in perspective, to do a DMP in 5 years would cost £250. Good luck,


Laura
@natdebtline

sourcrates

Do your IVA research very carefully before/if you choose a provider.

All companies charge fees for an IVA, but they differ greatly from one company to another, getting a breakdown of fees from say 3 different providers off an approved list, will be of most benefit.

Approved IVA providers can be found on the stepchange or National Debtline websites.

MrsTinks

hmczippy wrote: »

It's Debt Management Company called Debt Support Service.

There is half of your problem... You're wasting as much as 1/3 of your payment on a cowboy outfit taking a chunk of your payment. And bear in mind that the longer your DMP lasts the better for them as the more you will pay them.

Change to a non-fee paying DMP provider. As mentioned that should shave a good few years off your debt free date.

Also post up your SOA on here and we will see if maybe there is some more room in there so you can either make over payments or save up enough to make full and final payments to clear these in a few years

January2015

Would the OP qualify for a debt relief order? I'm surprised as a non-homeowner with £15k of debt this hasn't been mentioned.

Edit: Ignore me....just realised OP has more than £50 p/mth surplus income to put towards debts.

sourcrates

January2015 wrote: »

Would the OP qualify for a debt relief order? I'm surprised as a non-homeowner with £15k of debt this hasn't been mentioned.

Edit: Ignore me....just realised OP has more than £50 p/mth surplus income to put towards debts.

Well actually you have made a good point.

We would need to see a statement of affairs first to see what the OP's budget looks like.

It's not beyond the realms of possibility that he's not budgeting correctly, and that £110 can be whittled down to less than £50.

In which case a debt relief order would be ideal for him.

hmczippy

Oh wow thank you everybody. I have never heard of a debt relief order. How can I put up a SOA? Is there a template?

sourcrates

hmczippy wrote: »

Oh wow thank you everybody. I have never heard of a debt relief order. How can I put up a SOA? Is there a template?

Link here :

http://www.stoozing.com/calculator/soa.php

Format for MSE.

Info on debt relief orders here :

https://m.stepchange.org/how-we-can-help-you/debt-solutions/debt-relief-order?WT.srch=1&WT.mc_id=288007&WT.seg_1=debt%20relief%20order&gclid=CKra5MC9t9ECFSIL0wodqw0EYw