What Debt help would people recommend?

Grumpelstiltskin

OK so one of the 'debt help' is from a company pushing IVAs?

You do realize that these people are not advisors they are just salespeople looking for their commission.

Jfk126cars

Grumpelstiltskin said:

In the past few weeks we have found that Stepchange have been recommending IVAs when they are not suitable.

You do realize that you would pay the IVA company thousands in fees when there are no fees to a DMP run either by yourself or a charity?

Yes . Stepchange have said the fees are in the payment I make every month for the 5 year term of the iva. Basically putting would you rather pay a dmp for 17 years or an iva for 5 with the 12 months clearing time at the end....

EssexHebridean

Stepchange

An IVA can be an excellent solution if you fit into the very narrow group of people it is designed for. If you don't though, it's an expensive way of sorting your issues out. I think it's becoming very clear that a second opinion on the suitability is now a good plan regardless of who has recommended it, whether that 2nd opinion comes from people here who know their stuff, or from another of the free debt charities. 

Grumpelstiltskin

I have already explained to you that as you don't have a mortgage you will pay for 6  years not 5.

Add   Stepchange do not run IVAs they will refer you to an IVA company.

EssexHebridean

Stepchange

Jfk126cars said:

ManyWays said:

Do you own a car or have a car on finance? if on finance, when does it end, and is it PCP or HP?

Are you private renting, it is almost impossible to get a new tenancy in an IVA unless you have a guarantor.

How affordable is £130 a month, will you need to get that reduced when council tax, energy, water etc all go up in April? DMPs are flexible, IVAs only have a limited amount of flexibility and many of them fail, leaving you back with the debts and an insolvency showing on your credit record.

We have a car on pcp in my wife's name, renting is through council, atm I'm paying nearly £850 a month which is not sustainable so 130 is alot better. I've spoken to 3 different debt help and 1 says DMP and 2 say IVA. Just doing Overtime every month to keep up and be at home less is not sustainable.

It might be "A lot better" but the question is whether it is affordable. You need to do that SOA mentioned above to establish that.  In the meantime though, prioritise your monthly payments to ensure that your priority bills are paid, then the necessary discretionary spending, and only then pay anything to the debts. You can't keep making payments to unsecured debt and then having to use more credit to cover the priorities. 

EssexHebridean

Stepchange

Grumpelstiltskin said:

OK so one of the 'debt help' is from a company pushing IVAs?

You do realize that these people are not advisors they are just salespeople looking for their commission.

I think Stepchange were one of those suggesting the IVA - goodness knows why though. 

ManyWays

Stepchange

As you are council renting and do not own a car, it is likely that bankruptcy would be a much better option for you than an IVA if a DMP will take too long. An IVA has the same effect on your credit record as bankruptcy, but in an IVA you have to make payments for longer also IVAs can fail, bankruptcy cannot.

In bankruptcy if you can reduce your income low enough with no overtime, you may not even have to make any monthly payments, I dont know the numbers but the large majority of people going bankrupt dont make monthly IPA payments.

So your option is really DMP or bankruptcy. Lets see your SOA and can you talk about what may go better or worse for you in the next few years? 

ManyWays

Stepchange

Grumpelstiltskin said:

I have already explained to you that as you don't have a mortgage you will pay for 6  years not 5.

Add   Stepchange do not run IVAs they will refer you to an IVA company.

Not all IVAs for renters are 6 years. But if the monthly payment is low and the debts are high, some of the creditors may insist on 6 years

StepChange do provide IVAs

sourcrates

I have merged both your threads to give context, and save people answering twice.


The IP Stepchange use has amongst the lowest statutory charges in the industry.

IVA`s are really only suitable for homeowners, although in some limited circumstances they may be of benefit to non homeowners, its all budget dependant.

If you have high debts and little disposable income, and things stay that way, then a portion will be written off, but like Many ways says, creditors may insist on a 6 year term.