Please help

Steph8821

Afternoon all
@sourcrates  @fatbelly  if we improved our income and went into a dmp and paid a low figure say 40 50 pound a month, is there anything what could happen  could we get a ccj. Reason i ask is my partner really  would prefer if we didnt go down the insolvency route  albeit the  obvious choice.
Sorry for being a pain Steph x

fatbelly

Only a formal solution (DRO, IVA, Bankruptcy) will prevent court action.

A DMP won't but court action is not particularly likely. Roughly only one in ten defaulted debts go through court.

Paying off £43500 of debt through a DMP at £50 per month (which you don't have at present) would take 72.5 years. 

Does your partner have a reason why he would prefer that to bankruptcy?

Steph8821

He said to me last night we could save up for a mortgage and in 6 years we would have a decent deposit and a clean credit file. He said it would be harder if we went bankrupt. This is all new to me im trying to learn the ins and outs and make the best decision. X

fatbelly

Yes, you both need to keep reading and learning. Bankruptcy, DRO, ccjs all create a fresh mark on your credit file that lasts 6 years. When a debt defaults, that mark lasts six years.

The difference between the dmp plan and the insolvency plan is that after six years (hopefully) you will have a clear credit file with both solutions but the dmp would only have paid  £3600 off £43500 of debt - bankruptcy and DROs wipe off the whole debt and you're usually discharged after a year with both schemes.