No interest or charges

Cornishboy

Dear all,
Please could you give some advice based on your experiences. I am undecided between bankruptcy and DMP. Having researched the pros and cons of each my main query is : what is the likelihood of charges and interest being stopped on a DMP ? If this varies then I will more than likely consider bankruptcy. However, can any of you give advice on how long the IPA usually lasts for in bankruptcy. Stepchange say it can last up to 3 years whereas everywhere that I read says it IS 3 years.

sourcrates

Hi,

An IPA usually lasts the full 3 years yes, although you will only pay an IPA if you have £20 or more disposable income left at months end.

Make sure you budget correctly in every category and you may not get an IPA.

As for interest and charges been stopped on a DMP, usually a creditor will do this, but not always, they are not obliged to, but they must treat you fairly for the circumstances that you find yourself in.

What levels of debt are we talking about here ?

Cornishboy

About £36000. I have no property that they can take, nor savings. I am not old enough to receive my pension yet so that is also protected.

sourcrates

Cornishboy wrote: »

About £36000. I have no property that they can take, nor savings. I am not old enough to receive my pension yet so that is also protected.

General rule of thumb, if you have massive debt and property to protect, then IVA is the solution to look at.

No property or significant assets, then Bankruptcy may be the way forward.

A DMP sits somewhere in between the two.


Pro`s and Cons of each

In Bankruptcy, most of your debts are included, and you have legal protection from creditors, no legal protection in a DMP.

Bankruptcy discharged after 1 year, possible IPA for 3 years.
DMP will take many years to repay, dependent on your disposable income and if charges and interest are stopped.

Bankruptcy will effect your credit file for 6 years, DMP maybe longer if marked by AP markers.