IVA/DMP help

starlet1997

Hi guys

I am considering taking out either an IVA or a DMP due to the fact I am now paying probably a third of my income towards debts. I am not behind on any of them - however I am only making the minimum payment on my credit cards and the amount is not showing any signs of going down.

I wanted to consider a DMP as our incomes are likely to increase by a small amount over the next few months but then probably more significantly over the next few years- and I understand the DMP can be more flexible with changing the monthly payments. However I understand interest and charges are not necessarily frozen and therefore I’m wondering if there’s any point?

The IVA if I’m honest does seem a better option in some ways (the fixed term, potential to write off debt, more legally binding) however I do have some queries- I understand they review it every year - would I be penalised for things like buying Christmas presents, going on a short family break etc. And how would the income change affect this (would only be a few hundred a month at most for myself as an individual)

thanks for reading 

fatbelly

Nothing you're saying is pointing to insolvency being a sensible option. We're going to need more info to give sensible guidance.

How about doing a statement of affairs (links to a calculator) and post it in the debt-free wannabee board?

sourcrates

How much debt do you have ?
Are you a homeowner ?

In an IVA, you must budget for everything, and that budget is quite strict, there is little wriggle room for things like holidays, you may have to be creative with your budget, you can budget for Christmas presents etc.

You are expected to repay as much as possible for the benefit of your creditors, so don`t get carried away with the hype of massive debt write off's, it may not happen, especially if your income goes up.

There is also the re-mortgage clause in year 5, if a homeowner, or another year of payments if you are not.

Lots to think about.