IVA help wanted asap please!

paperstars

Hi all
I'm currently into a two year DMP with PayPlan and it's simply not working. I am paying up to £300 a month and I feel the balance just isn't going down at all and still have several more years to pay it off. I looked for help and was offered an IVA. However, I have been having some doubts. My car is worth around £4k, I paid for half of it and I owe my parents the other half. I still live at home, so do not have a mortgage etc. I have no dependencies. I currently owe to my mobile phone provider, EE, at least a sum of £250.
The questions I have are:
1) It's my birthday coming up soon, and more than likely my parents will put money into my bank account. Would this then effect the IVA, how often do they look at bank statements? Would it be best to set up a new bank account for birthday money etc but then this would be found out some how?
2) I have been told that it is likely that EE will cut me off but going forward I'd be able to obtain a pay as you go sim, which to be fair, wouldn't be much of an issue, as long as I kept my phone. Has anyone else had trouble with this?
3) I am doing some over time in the summer months, which will of course bring my monthly pays up by a slight increase. Will they need to take this into consideration too? Because the way I see it, there's not much point doing the over time if it is going to be swallowed by the IVA.
4) Clearly I'm not able to obtain a mortgage any time soon but I am coming up to 29, I don't want to think I simply cannot move out of my parents house for six years. Is it possible to rent at some point, whilst on an IVA?
I'm just freaking out a little. The DMP clearly isn't working, bankruptcy wouldn't be an option for me and a DRO wouldn't be any good for me either as my car is worth £4k as previously mentioned.
Any help is gratefully received. I have been looking on this forum for some time now but just need  some help with my own questions. I'm just really scared.

mwarby

Why do you feel bankruptcy is unsuitable, an IVA doesn't sound suitable if you have no property to protect. Worth bearing in mind payplan may stand to make some money off starting\referring an IVA

1 - modest gifts shouldn't be an issue

2 - many people don't have mobile cut off, certainly if you have a contract phone and are paying its a lit of hassle to cut off and recover phone. Worse case you can get phone sim only and get sim only contract or payg

3 - overtime is caught by an IVA, although I belive its normally arranged such that you pay over around half the overtime not all of it. In bankruptcy you'd afaik lose all overtime, but that's 3 years only not 5

4 - you'll struggle with a mortgage mostly due to being unable to save for a deposit, if that somehow wasn't an issue its normally 3-6 years post completion (bankruptcy is better here as 3-6 post discharge, which takes a year not 5 for iva completion). Regarding rent, you will struggle as you will have no landlord reference and a credit check done by most agents will show the IVA which is regarded as a fail

mwarby

Forgot to say, an IVA can fail most commonly if you are unable to continue the repayments at the agreed level, if your IVA fails you back to sqaure one (worse in fact as your DMP is gone). Bankruptcy cannot fail in that way, it can only really fail if you refuse to cooperate with the official receiver

mwarby

Re question 1 - gifts shouldn't be an issue during IVA (as long as modest, £50  at birthday or christamsis probably fine £500 may not be), but during the first 12 months of bankruptcy they should be avoided as maybe caught as after acquired property\asset

paperstars

Thank you @mwarby
With bankruptcy, I wouldn't be able to afford the initial £600 or so. I have around 10k or so in credit card debt. I got told that it would be very likely that my car would be taken away from me if I went down the bankruptcy route, something which I need on a day to day basis.

thevdm

With a DMP paying off 10k at £300 a month all should be clear in around 3 years 3 months (assuming interest is frozen), sign up for an IVA and you'll likely be paying £300 a month for 5 years (paying your 10k debt plus all the IVA fees) so not exactly a good deal.

With bankruptcy you'd be paying an IPA for 3 years (likely a similar amount) so £300 a month for 3 years, the fees could be made up by not paying the DMP for a couple of months before going bankrupt.

Personally, if interest is frozen on your accounts the DMP sounds like the best way to go, an IVA (as usual if you don't own a house) is probably the worst way to go. Of course it will be suggested, offered, even sold with glorious benefits, but that's because a debt management company will earn the most out of it.

mwarby

As thevdm points out a DMP may still be best option. If bankruptcy were suitable simply cease to pay the DMP for 2 months and your pretty much at bankruptcy fee

also just noticed the car and debt to parents. The car you may not be allowed to keep, the max value is £1k so they may sell and give you £1k to replace it, also if they don’t think you need a car they may just sell it to go towards your debts. You also wouldn’t be able to pay your parents, they would be in same position as the other creditors.

this makes me suspect that bankruptcy may be quite unsuitable

paperstars

The IVA have given me a sum of £80 a month though, as opposed to £300 on my DMP. This is why it seems so appealing to me

mwarby

Ok can we see a statement of affairs ? Assuming they are reasonable, bankruptcy would be the same each month but for 2 years less which is £1k less than IVA and can’t fail (but has downsides as per my last post)

mwarby

I notice you say up to £300 a month payment into DMP, are you in stable employment? If your not in a fairly stable job there is a real risk that
a) if you lose job or income goes down, the IVA may fail
b) if things improve job wise you’ll be asked to pay more each month

actuallg your not far off being suitable for a DRO. For a DRO you have to have less than £50 available for debt repayments, and have a car less than £1k(but more to it, but main points I see). You could sell car repay debts(you couldn’t repay parents in preference to others), get a £1k car and be free and clear in a year

Harlequinn87

Hi, i was in a similar situation however was in £33k debt with various credit cards, loan, overdraft and store cards. I was offered DMP and IVA but chose the DMP as i was advised it was the best option.

I get what you mean that you feel the balance isn't going down quick enough as i felt that same a year into my DMP but the only advice i could give you is seriously look at your monthly spend and ways of trying to earn extra cash. Any extra money i earnt either from overtime at work or from survey's online etc i put into paying my debt. I even done a spreadsheet detailing all my bills and out goings and updated everything to the last penny i was spending...i still keep to this day so i know exactly what is coming out each month and what i have left to live on.

Also look at trying to reduce any bills - car insurance, phone bill - not sure of your situation while living at home with rent or food bill etc - if you buy your own food possible try to cut down shop at Aldi/Lidl

Also limit going out to eat/cinema/pubs etc  i know bit of a downer but this helped me save money
Hope this helps