Payplan IVA - To sign or not to sign

macthejaffa

Me and my wife are currently applying for an IVA with Payplan and have just received our proposals, and suddenly alarm bells are ringing...Our monthly situation is as follows:

Total monthly income for month......£1800
Total priority expenses for month....£1500

Creditors summary: (monthly/balance)

Barclays Loan £67 / £2980
Black Horse Loan £45 / £135
GE Money Loan £68 / £3130
Lloyds TSB Loan £321 / £15605
Royal B of Scot. £45 / £2040
Cahoot Loan £100 / £4100
Capital One Credit Card £80 / £2095
MBNA Credit Card £90 / £4890
Lloyds TSB Credit Card £180 / £8010

Total Unsecured Debt: £996pm / £42985

Obviously things have been very stretched and very stressed, and we took these figures to Payplan and they suggested an IVA for us, but we would have to pay £322 per month, give up 75% of our equity in 4 years and live with the risk of being made bankrupt at any time by any disgruntled creditors. Also in November our fixed term on our mortgage expires and our monthly payment is due to shoot up from £495 to £950 which will obviously make meeting a high IVA payment nigh on impossible.
We're unsure whether the IVA is going to benefit us at all and whether a DMP would be the best thing.

Has anyone else found themselves getting cold feet like this when about to commit to an IVA, or do people prefer a free DMP over IVA.

We're very confused, very stressed and just don't know what to do or where to turn and any advice would be gratefully appreciated...

SarahNeedle1872

Can't help I'm afraid, just wanted to send u a (((hugs))) and say good luck with whatever u decide..... someone will be along to help shortly so sit tight!

Sarah x

sallyx

Did Payplan suggest the IVA or was it something that you went to them with the idea of doing? A DMP might be possible, could you post your SOA including your monthly living expenses such as Mortgage, TV License, Any insurances, council tax, etc etc

Gemmzie

I always thought that an IVA budget was designed so that you could live on a sensible budget for those 5 years. If you cannot make the payments as from November then you aren't suitable for an IVA.

Sassamac

I thought DMP nad IVA amounted to the same thing, so maybe Im not the best person to ask, but we're due to remortgage in July, so I can tell you what I know about that.
Our CAB debt advisor, recomended we steer clear of anything in terms of these payment plans or even writing to companies ourselves to ask for frozen interest, putting payments on hold or accepting token payments. The reason being being it will batter the credit rating for 6 years, and we will be worse off in terms of the mortgage we get offered. So were sticking it out for 6 months, then review the situation.

Sassamac

are you in receipt of tax credits or any other type of benefit?
have you checked all your bills to see if you can get better deals?
can either of you get a payrise / better paid job / second job?

macthejaffa

sallyx wrote: »

Did Payplan suggest the IVA or was it something that you went to them with the idea of doing? A DMP might be possible, could you post your SOA including your monthly living expenses such as Mortgage, TV License, Any insurances, council tax, etc etc

payplan suggested both DMP or IVA but as a DMP takes longer to clear debts they advised an IVA would proberly be the better option

our SOA is as follows

Mort £495 (at the min, fixed rate changes in Nov 08)
council tax £110
gas £40
elec £40
water £30
joint life insur £24
buildings & contents insur £28
tv license £11.50
car insur £25
car tax/mot £20
petrol £40
food, toiletries, cleaning £520
pets pet food insur £20
repairs and serv £25
telephone/tv £60
Childrens clothing/footwear/school £80
Total expenditure £1568.50

Income
wages £800
CTC £400
WTC £220
Child Maintenance £240
Child Benefit £169
Total Income £1829
Surplus income £261

sallyx

Personally I think I DMP would be better for you. We started on a DMP back in July and although our total debt is about half of what you owe, our desposible income (amount we have left to service debts) is about half of what you have. The great thing about once you have the DMP set up, you get yearly reviews and sooner if needed and the ability to change what you pay (obviously in negotiation with lenders).
I would maybe go back to Paypal and discuss with them the options of a DMP. If you want a second opinion then give the CCCS a call
Obviously this is my opinion and they maybe know more details and think an IVA is the best for you, but I would get their reasoning
HTH