Dmp/iva

cozasmom

I have been looking to go into either an IVA or DMP . I have approx £16K in debt to credit cards and have a mortgage on the house. I have not defaulted on any of the payments and have all four cards on low interest rate/nil percent but just fed up with juggling them all about. IfI do a DMP do you have to pay the full amount owed and will they freeze the interest . I know if I go in to an IVA it will cost me more money to set up but I may be able to write off some of the dent - is this the same for DMP. Also which one effects the credit rating more - I understand IVA will go on for 6 yrs is this the same for DMP.

Thanks for your help all

Tigert

Hi,

A DMP will go on for as long as it takes to clear the debt. You basically take your surplus income and divide it pro-rata amongst your creditors each month. A lot of creditors will either reduce interest or stop it completely but this is not guaranteed.

I don't know a lot about IVA's so I'll let somebody else answer that.

I'd recommend you contact either CCCS or Payplan. They will both advise you on the best route to take and neither will charge you.

jenevieve

Hi cozasmom,

If you go for a DMP through someone like CCCS, they will contact your creditors on your behalf and ask to freeze the interest and allow you to pay what you have worked out what you can afford (this is done with CCCS's help). The idea is to pay off your full balances. Going on a DMP is generally recommended if you are unable to meet your minimum payments, as far as I know.
If you are able to meet your minimum payments, they may suggest you look at your incomings/outgoings to see if you can alter anything to increase your payment.

CCCS website have an excellent tool called 'debt remedy' that will give you an idea of the options available to you.

Equally, you could post your SOA so that the excellent folk here on the DFW board can see if they can suggest anything to help.

GeorgeUK

Please get advice before doing an IVA. The is basically one step away from bankrupcy and most people who have a home and facing bankrupcy apply for the IVA. If something happens and you fail ta keep up the payments, then you may lose your home.

Have you posted up a SOA? We may be able to save you money in other areas which will take some of the sting out of continuing the payments you are currently making.

With a DMP, your credit score could be shot for the next 6 years. If the minimum payments on the cards is less than you have available to spend on the debts then you don't need a DMP. Have you tried looking at the snowball calculator to make sure you are paying off the most?

cozasmom

Thanks for your replies and your advice- just really want to clear these debts and looking at all the best options. I will just have to accept that I will not clear these debts overnight but just keep chipping away at them over the next 5 years and maybe changing and altering as necessary - is this what most people are doing to see their way thro aparts from DMP nd IVA ??

GeorgeUK

Most people seem to be doing DMP's or tarting the cards so that they are paying very little interest. I suppose you have checked the snowball calculator to see that you are paying off the amounts that will save you the most money?

http://www.whatsthecost.com/snowball.aspx

cozasmom

Hi

No I havent done that - thks for advice I will do that asap .