dmp or iva

135

Comments

  • RAS
    RAS Posts: 32,613 Forumite
    Name Dropper First Anniversary First Post
    You once you've got your default, you make a small payment monthly, some creditors will want an SOA, but you don't often have give them one. Although any debt management provider will expect your adult children to contribute at least to utilities and food.

    Your current income is about 19% of the couple income (ish because it's not clear how much you are subsidising the other adults),  so you'd pay 19% of household costs plus your own phone etc.
    The person who has not made a mistake, has made nothing
  • sourcrates
    sourcrates Posts: 28,810 Ambassador
    First Anniversary Name Dropper First Post Photogenic
    Debt management is very simple to operate and set up.

    (1) you allow payments to slide for a good few months, to build up an emergency fund.
    (2) you work out a budget you can live with, you don`t have to show it to anyone, and it doesn't have to be the actual one you use, its just for DMP purposes.
    (3) no explanations required, no income/expenditure to send (unless you want to) simply start making payments to whoever is writing to you asking for money, at this point most will be debt collectors.
    (4) makes no difference if they don`t like what your paying them, if they hate it that much they will just sell the debt to someone else.
    (5) there are hundreds of thousands of homeowners in debt management, majority of which pass off smoothly and without incident, even if a CCJ was granted for any particular account, as long as payments are maintained the creditor cannot further enforce their rights.
    (6) interest will get added to begin with, but most DMP`s end in settlement offers, so savings are made when you settle for a reduced amount.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • tp555
    tp555 Posts: 26 Forumite
    First Post
    Debt management is very simple to operate and set up.

    (1) you allow payments to slide for a good few months, to build up an emergency fund.
    (2) you work out a budget you can live with, you don`t have to show it to anyone, and it doesn't have to be the actual one you use, its just for DMP purposes.
    (3) no explanations required, no income/expenditure to send (unless you want to) simply start making payments to whoever is writing to you asking for money, at this point most will be debt collectors.
    (4) makes no difference if they don`t like what your paying them, if they hate it that much they will just sell the debt to someone else.
    (5) there are hundreds of thousands of homeowners in debt management, majority of which pass off smoothly and without incident, even if a CCJ was granted for any particular account, as long as payments are maintained the creditor cannot further enforce their rights.
    (6) interest will get added to begin with, but most DMP`s end in settlement offers, so savings are made when you settle for a reduced amount.
    thank you for this, can I just ask in step 3 - am I  supposed to wait for the defaults to happen before I start paying? and ignore the debt collectors? its scary doing it myself but I think I've got it - just don't want to make another mistake that backfires! just not clear on when to start making the payments. 
  • RAS
    RAS Posts: 32,613 Forumite
    Name Dropper First Anniversary First Post
    You need defaults, as swiftly as the slow creditor process allows. If you engage in conversations with your creditors you just slow that process down. 

    They will write, text, try and ring, whatever their computer programme tells the system to do next. Block emails, texts and phone numbers. Write and advise you want them to communicate by mail only.

    Once a week go through your correspondence and file it. You are looking for the default letters at that stage, everything else is irrelevant. 

    You may get a letter about the same time telling you the debt has been sold or assigned to someone new. In which case you set up an SO for the new contact for £5 a month. Given your  current situation, that's pretty much all you can afford.

    You can adjust the payments if you want, but by that stage interest should be frozen, so aim to increase payments on the larger debts, and perhaps target one smaller debts for any ad hoc extra payments. Just to give your self a boost when you see one cleared.

    Continue to monitor the mail as if you get a letter before action, you need to respond promptly.
    The person who has not made a mistake, has made nothing
  • tp555
    tp555 Posts: 26 Forumite
    First Post
    RAS said:
    You need defaults, as swiftly as the slow creditor process allows. If you engage in conversations with your creditors you just slow that process down. 

    They will write, text, try and ring, whatever their computer programme tells the system to do next. Block emails, texts and phone numbers. Write and advise you want them to communicate by mail only.

    Once a week go through your correspondence and file it. You are looking for the default letters at that stage, everything else is irrelevant. 

    You may get a letter about the same time telling you the debt has been sold or assigned to someone new. In which case you set up an SO for the new contact for £5 a month. Given your  current situation, that's pretty much all you can afford.

    You can adjust the payments if you want, but by that stage interest should be frozen, so aim to increase payments on the larger debts, and perhaps target one smaller debts for any ad hoc extra payments. Just to give your self a boost when you see one cleared.

    Continue to monitor the mail as if you get a letter before action, you need to respond promptly.
    Thank you that makes it clearer - if I did get a letter before action, what would i need to do?

  • fatbelly
    fatbelly Posts: 20,437 Forumite
    Name Dropper First Anniversary First Post Cashback Cashier
    A letter before action has to come in a standard form with a reply form and a 30-day limit. There is a guide that we point you to from Debt Camel.

    You're unlikely to get one on your strategy
  • tp555
    tp555 Posts: 26 Forumite
    First Post
    Thank you all for your help, that has been really useful - I'm going to do the DMP and I'm just hoping they will let me take my name off the joint account with us having a joint mortgage with the same bank
  • RAS
    RAS Posts: 32,613 Forumite
    Name Dropper First Anniversary First Post
    I'd suggest that you get your name off the joint bank account as a priority. 
    The person who has not made a mistake, has made nothing
  • tp555
    tp555 Posts: 26 Forumite
    First Post
    RAS said:
    I'd suggest that you get your name off the joint bank account as a priority. 
    Thank you yes I'm doing that today
  • tp555
    tp555 Posts: 26 Forumite
    First Post
    An update - I have decided to go for the DMP thanks to all for your valuable information and help - yesterday out of the blue, I got an email requesting payment for £2400 bill dating from 2016 from a creditor for a business that I used to run but which was dissolved in 2019. It never rains but... Longshot because I know this is not a business site but any idea what to do about that considering my current circumstances? Thought it was as bad as it can get, but apparently not. Feeling very low and like a complete failure. 
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