Help to Buy ISA with a DMP?

beans89

Hi, I think I know the answer to this already but here we go.

I am currently on a debt management plan paying the minimum every month to my creditors as I have no means to pay them any more at this moment in time. A relative has told me to open a Help to Buy ISA before this weekend (before the scheme closes for good), and she will kick start it off by transferring £1,200 into it for me in the first month, followed by £200 next month and £200 the month after that. It'll just be those three payments going in as she cannot afford to keep paying into it for me. She does not know that I am in debt and believes this will help my partner and I purchase a house in however many years' time.

I am concerned about this though and am so what inclined to say thanks, but no thanks.

With me being on a DMP, I don't know how it works in terms of creditors or my DMP reviews, but surely opening this ISA will go on my credit file and my creditors will see that I have £1,600 in an ISA which they will think, great we can use that to offset the debts? Even though it is not my money, it's my relative's money, it's just in an account that is in my name.

I don't know what the future holds, but if my creditors were to take me through the courts or if I were to apply for an IVA/bankruptcy, again, would this money be used to offset against my debts?

Am I best off just telling her to keep hold of the money?

Sounds silly, but I thought I'd ask the question in case anybody else has gone through a similar thing.

Thanks in advance.

eskbanker

ISAs, like other savings accounts, don't appear on credit files, but that doesn't mean that it's a good idea to do this - the only way for you to have a valid HTB ISA is to do so with your own money, i.e. if it comes from someone else it must be gifted, so it would be fair game if creditors got wind of it. I'm not familiar enough with the mechanics of DMPs but what are the obligations you signed up to when entering into it?