IVA and DMP

HarriettPotter

I wonder if anyone could tell me the difference between these two, or give me a description of what they are? If I phoned someone like CCCC would they give me an overview and present these as possible debt solutions?

If anyone knows of a weblink or something where I could read about all this I would be grateful. I would like to know about the implications of things like having a mortgage if you use one of the debt solutions above etc?

I have had a search across the forums but people's posts tend to be specific and if possible I would like to find a more general overview. Hope someone can help...

H

jen_jen_2

an IVA is an idividual voluntary arrangement and is a formal insolvency, basically you make an agreement through and Insolvency practitioner (IP) to pay off the debt, often for a % of the amount owed. This is expensive, the costs of the IP but creditors often agree to the expense when they vote on whether to accept the offer you put forward. if you fail to keep up the IVA the IP can begin bankruptcy proceedings.

this option is best if you have lots of debt and dont want to loose assests (eg house). the creditors take no further action as long as you are keeping to the IVA. some IPs ask for money up front to arrange the IVA dont do this look for a company that charges in the IVA (grant thornton have a decent reputation). an IVA will last about 5 years

a DMP is a debt management plan and is simply an agreement between you and creditors and is often arranged by a third party, these can be debt management companies that you pay (dont) or free ones eg payplan, CCCS. you make a payment to the debt management company and they forward that payment to the creditor. alternatively you can agree payments with all creditors yourself and make payments to each (CAB will help you negotiate this kind of deal)

you will useually get interest frozen so the debt isnt continuing to grow but the creditors can still take action eg get a CCJ if they do not like the offer (the court will useually accept the offer). this kind of offer wont normally have a reduction in the debt and it will last till the debt cleared.

you do have another option, depending on your circumstances and that is bankruptcy, this will last one year and you may have to make payments for up to 3 years (depending on income and expenditure) you will have to sell any assets eg house, car (if not for work).

if you phone CCCS or go to CAB you should get some independent and free advice.

look at the national debtline website for info and im sure some others will be along with suggestions, just remember when taking advice of companies if there is something in it for them (a payment) they may not be giving you the best advice for you.

mattp_3

Here are the links for the free debt advice agencies - you can look on the websites or give them a call if you prefer:

Payplan - https://www.payplan.com (0800 716 239)
National Debt Line - https://www.nationaldebtline.co.uk (0808 808 4000)
CCCS - https://www.cccs.co.uk (0800 138 1111)

Good Luck