DMP or IVA?
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In a nutshell you do not have sufficient disposable income for any permanent solution to your debts.
You can either carry on until your debts drop below 20k, then try for a DRO.
Go bankrupt, or as the debts are all non essential, pay each £1 a month, and see if things improve in time.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
sourcrates wrote: »In a nutshell you do not have sufficient disposable income for any permanent solution to your debts.
You can either carry on until your debts drop below 20k, then try for a DRO.
Go bankrupt, or as the debts are all non essential, pay each £1 a month, and see if things improve in time.
The paying of the token £1 a month is that like a DMP? Am I likely to get baliffs etc knocking at my door? Feeling very stressed about all of this but thank you for you help.0 -
Also when I spoke to MBNA she went through a budget thing with me and said that they would set a payment (which happens to be £190) but they didn't expect me to be able to pay that. They have also stopped all interest. Does this mean that I have some payment plan with them and again wont have people knocking at my door? I haven't defaulted on anything yet but will do soon as I cannot carry on like this. How will this affect things like my banking, getting car insurance, contents insurance etc? Would it mean i'd have to pay in full rather than monthly? Currently we have sky, mobile, car tax and utilities that are I guessed based on credit. Would all this change? Sorry for all the questions.0
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sammyjo1979 wrote: »Also when I spoke to MBNA she went through a budget thing with me and said that they would set a payment (which happens to be £190) but they didn't expect me to be able to pay that. They have also stopped all interest. Does this mean that I have some payment plan with them and again wont have people knocking at my door? I haven't defaulted on anything yet but will do soon as I cannot carry on like this. How will this affect things like my banking, getting car insurance, contents insurance etc? Would it mean i'd have to pay in full rather than monthly? Currently we have sky, mobile, car tax and utilities that are I guessed based on credit. Would all this change? Sorry for all the questions.
Ok, take a breath........r e l a x........lets summarise, you seem confused about what you have actually agreed too, that is why its always best to do these things in writing only, it appears you have agreed to something you cannot afford to pay with MBNA.
As a first step, remove all ability for your creditors to take payment from you, that means cancel direct debts, card payments, standing orders etc.
Next write to all your creditors telling them you are in financial trouble, you will automatically get 30 days grace with no collection activity, do a proper budget that shows no surplus, include a copy of your budget in the letters, tell them you are taking advice.
After that, get in touch with one of the free debt advice services in my signature, see what they advise you to do.
I would suspect they will opt for bankruptcy, but see anyway.
No one will be knocking on your door, please read up on when bailiffs can and cannot be used, you are a long way off that happening, there would be a court process to go through first.
Creditors are much more in tune with customers in difficulty nowadays, and have been ordered by the regulators to treat everyone fairly, there is a solution to this, it is just another problem that needs to be solved, you just need the right advice.
You will have no problem with any insurance etc, I was insolvent and I managed just fine.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
No baliffs with the debt you have listed - would have to go through alot of defaults, and ignoring of the debt, court ordered payments etc etc etc
so long as your priority debts - C/Tax, rent, TV licence are up to date and nothing owing, get the bailiff though off your mind.
from what you have listed, you have 5 debts - it will be easy to control and get everyone up to speed with what you are going to do/plan on doing, as sourcrates has already said
one step at a time...0 -
No baliffs with the debt you have listed - would have to go through alot of defaults, and ignoring of the debt, court ordered payments etc etc etc
so long as your priority debts - C/Tax, rent, TV licence are up to date and nothing owing, get the bailiff though off your mind.
from what you have listed, you have 5 debts - it will be easy to control and get everyone up to speed with what you are going to do/plan on doing, as sourcrates has already said
one step at a time...
Hi, thank you. I am a bit panicked! We are not behind on any household things at all and have never been. It is literally just the cc's. Haven't spent on them either for the last year but the interest is killing me and i'm paying very little off now.0 -
sourcrates wrote: »Ok, take a breath........r e l a x........lets summarise, you seem confused about what you have actually agreed too, that is why its always best to do these things in writing only, it appears you have agreed to something you cannot afford to pay with MBNA.
As a first step, remove all ability for your creditors to take payment from you, that means cancel direct debts, card payments, standing orders etc.
Next write to all your creditors telling them you are in financial trouble, you will automatically get 30 days grace with no collection activity, do a proper budget that shows no surplus, include a copy of your budget in the letters, tell them you are taking advice.
After that, get in touch with one of the free debt advice services in my signature, see what they advise you to do.
I would suspect they will opt for bankruptcy, but see anyway.
No one will be knocking on your door, please read up on when bailiffs can and cannot be used, you are a long way off that happening, there would be a court process to go through first.
Creditors are much more in tune with customers in difficulty nowadays, and have been ordered by the regulators to treat everyone fairly, there is a solution to this, it is just another problem that needs to be solved, you just need the right advice.
You will have no problem with any insurance etc, I was insolvent and I managed just fine.
Thank you for this. It just all seems very daunting at the moment.0 -
So I have spoken to SC today who have given me the option of a DMP or an IVA. The DMP would take me 12 years to pay off but i'm okay with this as it is my debt.
Could someone advise me though, does this mean that my credit file will be terrible that whole time? I've seen conflicting info about it. Some people are saying it will drop off my file after 6 years even though the debt is still outstanding/being paid and then i've also seen that it will stay on for the 12 years i'm paying it off for plus an additional 6!
Would anyone be able to advise?
Thank you
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Hi sammyjo1979,
You want your creditors to mark the accounts as defaulted, so that the debts drop off after six years, even though you are still paying the debts down. You can ask them to do this. See the thread linked below for guidance:
Punished for DMP
If they mark the debts as AP (Arrangement to Pay), then the debt will stay on there for 12 years, until the account is settled.I work within the voluntary sector, supporting vulnerable people to rebuild their lives.
I love my job
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I agree with the advice from above, maybe enter a DMP for now until you are able to get your debts to under £20,000 then maybe look at the DRO option. It may take a while to get to this stage but your credit file will already be limited due to the when your accounts default, so the DRO shouldn't affect you too much. It beats paying into a DMP for 12 years.Chandelier.
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