Debt advice DMP,IVA,DRO

sourcrates

Reasons why an IVA would be unsuitable:

(1) You have no assets to protect, so nothing to lose (potentially).
(2) You have an erratic income, an IVA requires a steady income for a maximum 72 months.
(3) Staying with income, you do not have sufficient income to make an offer of payment with.
(4) You are, technically homeless, an IVA is a form of insolvency for which legal papers must be served from a court, for this you need an address for service.

You can`t miss a payment one month because business has been bad and hope to make it up the next, IVA`s do not work that way.

IVA`s are bankruptcy for homeowners, if you have no property, an IVA is not for you.
 
In your current situation you will be better served by an informal debt management/token payment plan, when money becomes available, try and save into an emergency fund, then a bit further down the line, settlement offers should reduce the time spent in a DMP.

Everything revolves around affordability these days, creditors will accept whatever your budget says you can afford, this also applies to the courts, the cost of living crisis has hit everyone hard, including the debt industry.

4A414B45

Grumpelstiltskin said:

Debts will disappear 6 years from the date of default whether they have been paid or not.

If you start to pay before they have defaulted then yes it is 6 years from final payment.

A DMP doesn't always mean you will pay 100% of the debts, down the line you may be able to get a reduction.

Before you start a DMP you need an emergency fund, no access to credit if the washer and cooker break down in the same week so think about that.

Can you clarify what you mean with the first two bits does that mean both would be six years from now?

oh well thats good new I wasnt aware of reductions with DMP

yeah aware of that, already in that position anyway.

Grumpelstiltskin said:

OK creditors can in theory take further action, what is the point of pursuing you for more money when you are paying what you can afford?

IVA is not a magic bullet, remember you will be paying the IVA company's fees on top of what you owe and it is an official insolvency where a DMP is not.

Because what about if I gain more assests? my vehicle? my assests that I need for work which I will have to expand on?

yeah, by using online calculators theres around £24K difference between paying the DMP and paying an IVA which for me is a massive difference even with the fees, that would give me some other options for example potentially I could borrow that from family and pay a lump IVA?

Grumpelstiltskin

You have read Sourcrates post?

A DMP is an informal way of paying your debts, you decide what you can afford to pay, your pay that amount to each creditor you don't have to give them an SOA ( some will ask for one but you don't have to give them one )
How will your creditors know if you get another vehicle?

It is relatively easy to do this yourself without involving one of the debt charities.

4A414B45

sourcrates said:

Reasons why an IVA would be unsuitable:

(1) You have no assets to protect, so nothing to lose (potentially).
(2) You have an erratic income, an IVA requires a steady income for a maximum 72 months.
(3) Staying with income, you do not have sufficient income to make an offer of payment with.
(4) You are, technically homeless, an IVA is a form of insolvency for which legal papers must be served from a court, for this you need an address for service.

You can`t miss a payment one month because business has been bad and hope to make it up the next, IVA`s do not work that way.

IVA`s are bankruptcy for homeowners, if you have no property, an IVA is not for you.
 
In your current situation you will be better served by an informal debt management/token payment plan, when money becomes available, try and save into an emergency fund, then a bit further down the line, settlement offers should reduce the time spent in a DMP.

Everything revolves around affordability these days, creditors will accept whatever your budget says you can afford, this also applies to the courts, the cost of living crisis has hit everyone hard, including the debt industry.

Thanks,

I have read a few articles and I didn't think you had to be a homeowner to have an IVA? the CAB states no particular assests are required?

Cant post the link as im new but its on the page about if an IVA is right for you

1/ Assests include Vehicle and work equipment
2/3/ I've read IVA requires a minuim Payment of £100 per month? which is manageable to maintain steadily(even for the past six months I would of been able to have that covered)
4/ I have correspondance address

"In your current situation you will be better served by an informal debt management/token payment plan, when money becomes available, try and save into an emergency fund, then a bit further down the line, settlement offers should reduce the time spent in a DMP."

what exactly do you mean by settlement offers? is this a reduced settlement figure? or do you mean just save up and pay big chunks off the total amount?

looking at online calculators DMP will cost me an additional £24K

Grumpelstiltskin

Look how many posts Sourcrates has made on this forum, do you think they know what they are talking about?

Forget an IVA, as I said a DMP is an informal solution, if  your circumstances change in the future you can change what you pay etc.

Slow down and  don't rush into anything.

RAS

An IVA is an insolvency solution which has to be declared whenever you are asked "have you ever been bankrupt/insolvent?" 

It costs a pittance for a Landlord or EA to check the Insolvency Register (it's public) so during the IVA you'll probably need a guarantor and up to a year's rent in advance, although they might accept 6 months.

IVA budgets are very tight and very inflexible, a good third fail and those that survive mean living a very tightly controlled life for 6 or 7 years. They are very popular on social media because the fees you are charged are £4-9k, the lower ones being social providers. Most advertisers on social media are just introducers who get their fees for referring people to the Insolvency providers who get the bulk of the money.

Once defaults happen, you know that in 6 years you have a clean slate. Meantime EAs and LLs may not even check you credit record, many just ask for salary and bank records. By that time a DMP ends you may well be offered discounts of 50-75% for full and final settlements. And meantime you decide on the budget with which you can live and pay a reduced rate. You save an emergency fund first and during the DMP, so you can cope if home goods or the car dies, or if there is a family emergency. 

Although you can do an IVA for less than £10k, generally it's more appropriate for those over £30k. 

sourcrates

4A414B45 said:

Thanks,

I have read a few articles and I didn't think you had to be a homeowner to have an IVA? the CAB states no particular assests are required?

Cant post the link as im new but its on the page about if an IVA is right for you

1/ Assests include Vehicle and work equipment
2/3/ I've read IVA requires a minuim Payment of £100 per month? which is manageable to maintain steadily(even for the past six months I would of been able to have that covered)
4/ I have correspondance address

"In your current situation you will be better served by an informal debt management/token payment plan, when money becomes available, try and save into an emergency fund, then a bit further down the line, settlement offers should reduce the time spent in a DMP."

what exactly do you mean by settlement offers? is this a reduced settlement figure? or do you mean just save up and pay big chunks off the total amount?

looking at online calculators DMP will cost me an additional £24K

IVA`s were introduced specifically for homeowners who had massive debts, and an asset to protect, and who could not go bankrupt.

An IVA gives you legal protection so your home cannot be repossessed.

Unfortunately regulation of IVA`s has not kept pace with their use, consequently many of them are mis-sold to those with no assets to protect, and to those who are wholly unsuitable for one.

You have no assets to protect, so you may as well just go bankrupt and have it all over and done with within a year, instead of sticking it out for nearly 7 years in an arrangement totally unsuitable for you.

There is no point in you having an IVA when you can just go bankrupt.

The informal DMP route is your other option, your debts won`t stay with the original creditors for long, they will be sold to debt purchasing companies, who will buy them for less than their face value, so in time, they can afford to send you full and final settlement offers, where by you just repay a percentage of the debt you owe to settle it.

These offers vary by company, but savings of up to 50% can be achieved.

So your choice would be go bankrupt, fresh start in12 months, credit file clear again in 6 years, or the less formal approach which would take longer but would avoid bankruptcy, your decision.