IVA vs DMP last minute doubts! Advice please!!

nbdrums1

Hi All,
I have £37K on credit cards and overdrafts which I stupidly acquired due to one thing or another (anxiety and depression not helping!), the last £10K of that was probably me trying to keep on top of all the other payments!!

Anyway, I recently followed advice on these boards and spoke to payplan, who after being great have advised me to do an IVA as if I did a DMP then it would take me 21 years to pay the debt off at what I can afford.

They told me about the releasing equity in the 4th year and said that as I have a property which is jointly owned by a relative and myself, this would be my best option, but most people aren't forced to do this, and they just get a year added on the end, before everything is written off.

The question I have is, if I have to sell and move before my IVA has finished (in 2 or 3 years time) will the creditors come looking for the total amount outstanding from the small amount of equity I might get out, which would leave me with nothing.

Someone said to me that with a DMP I would not have to do this and they would not be able to force me to pay the outstanding debt (as I will need to try and get another house). but it would take a lot longer obviously to pay it all off.

I see on some posts that people are happy when on a DMP their debts get defaulted, why is this? please can someone explain.

As I haven't actually signed anything yet with payplan I am still able to change my mind if I want to and do a DMP, I just don't want to make the wrong decision as I have already seemed to have done this a lot over the last few years!!

But time is running out and any advice would be greatly appreciated!! thanks!

sourcrates

Hi,

In an IVA any equity from a house sale would be classed as a windfall.

Under the terms of your arrangement this would have to be paid to your IVA for the benefit of your creditors, you would have no choice in the matter.

A debt management plan is an unregulated, informal arrangement, creditors have no say over your assets, so the house sale proceeds would be yours to do as you wish.

People like defaults, as once an account defaults you know that 6 years from the default date it will be gone from your credit file.

In contrast arrangement to pay markers (AP) stay on your file for 6 years AFTER the debt is paid off, so potentially a very long time.

nbdrums1

Thanks for the advice I really appreciate it!

So just to clarify, the AP markers only go on your account if you do a DMP?

Also can you switch from a DMP to an IVA at a later point?

If I went down the DMP route, will creditors pursue me legally and try to take my house/assets?

I feel I’m being pushed toward an IIVA (by PayPlan) and for some reason it doesn’t seem to sit well with me and I’m scared of making a mistake!

Thanks again!

sourcrates

AP markers usually apply to DMP only as legislation governs how your credit report is marked in insolvency.

You can start with a DMP, you can do what ever you like to be honest.

Once the house is sorted, you can still do an IVA.

Creditors unlikely to pursue your assets, lots of home owners on here in debt management.

In your case DMP only a short term solution.