DMP Options

[batchy_21]

Re: DMP Options

Umm its starting to look like i would waste my time with a DMP. In 12-18 months i would either be in the same position as interest wold have started on my overdraft and credit card. Im not expecting any lump sums or a lottery win !!

My pay will increase by £900 a year in november and thats it. I have an appointment with my works Occupational Health department who can advise on debt matters i have heard of someone getting a loan from my employer interest free to clear debts apparantly ! although i wont hold my breath !! as its probably a load of rubbish.
thanks for al your advice any advice regarding the position of my divorce settlement and the ex credit rating if i IVA would be helpful
Thanks

[odetter]

Re: DMP Options

Having wasted 7 years on a DMP with Payplan I can honestly advise anyone not to bother.
After 7 years debt reduced from 26k to 12k!!
What a joke.
With an IVA I would have paid 10k and now been debt free.
Do the sums!!

[odetter]

Re: DMP Options

Not ALL. Only enough creditors so that the debt owed to them is 75% or more of your total. If approved, the ones that didn't agree would have to lump it.

Yes your quite right, I should have quantified that statement!!

[SaltnVinegar]

Re: DMP Options

Just out of interest if i defaulted on the debt and didnt pay anything i know they would pass it to a DCA and defaults on my credit file. Would i be liable then for a CCJ and have to attend court etc not sure on the norm for this. Or is it better to default and then offer a reduced monthly payment until its cleared !!?? thanks

If you go on a DMP you WILL get defaulted eventually and this will reflect on your credit file (eventually).

What some creditors will do is they won't default you until you are 6 FULL months in arrears. So, for example, you only pay 50% of the contractual payment then it could take 12 months before they default you.

I know because I've been there - a DMP can be a slow painful death which doesn't do much to extradite you from debt unless its sensible. If you read around the forum enough you will see there are also plenty of people who Stepchange didn't get interest frozen (and didn't tell them), only to 'finish' the DMP and find they are in as much debt as they were to start with!

Being on a DMP doesn't mean a creditor won't go for a CCJ either.

What position would you be in 12-18 months time to make offers to creditors?

[Riz]

Re: DMP Options

If you default by paying less that the contractual amount then creditors or DCAs are free to go for a CCJ. Most of the time they won't and will accept (eventually) reduced payments, but there are no guarantees. However, if you get help producing you budget and offer etc, then you may make it less likely.

If it did go to court then unless you dispute something, you would not normally have to attend. It just a back and forward shuffle of paperwork via post.

[batchy_21]

Re: DMP Options

Just out of interest if i defaulted on the debt and didnt pay anything i know they would pass it to a DCA and defaults on my credit file. Would i be liable then for a CCJ and have to attend court etc not sure on the norm for this. Or is it better to default and then offer a reduced monthly payment until its cleared !!?? thanks

[Riz]

Re: DMP Options

An IVA is a formal arrangement usually lasting 5 years, the advantage being fixed payments and a 75% write off the debt.
However all creditors would have to agree

Not ALL. Only enough creditors so that the debt owed to them is 75% or more of your total. If approved, the ones that didn't agree would have to lump it.

[batchy_21]

Re: DMP Options

Hi all thanks for your help. I will discuss my options before rushing into anything. 6 years before a mortgage is fine as it would take me that long to get a deposit anyway !!.

[odetter]

Re: DMP Options

An IVA is a formal arrangement usually lasting 5 years, the advantage being fixed payments and a 75% write off the debt.
However all creditors would have to agree and like BR any windfall you receive during that 5 years such as Inheritance, bonus, lottery win etc would be used to satisfy your creditors.
As 17k isn't a vast sum you could negotiate individual payment arrangements with each creditor.
You would first have to default your accounts and then arrange payment.
Therefore when your financial situation improves you'd be able to increase your payments or make a F&F offer.
Either way you wouldn't be eligible for a mortgage until 6years after default.
It might be worth consulting an Independent Insolvency Practitioner, I found their advice very useful and it was free!!
Good Luck

[SXGuy]

Re: DMP Options

The fact is, whatever you decide to do, you will get defaulted. So the best way forward I think is to put you in a position whereby you can afford the payments. Keeping your credit file clean isn't an option at this stage.

[batchy_21]

Re: DMP Options

Hi all thanks for your replies !. Firstly in my employment i cannot apply for bankruptcy i think an IVA is fine. I am looking to speak to someone through my work as well who can provide advice. I dont want to rush into anything but i cannot go on paying so much out each month. I suppose i can regain my credit file in the future.
Undercover elsa - i owe £17300 not including parents so i think a DRO isnt applicable. I have had a look at the NEDCAB and it is very good. Thanks for your kind offer to have a look when i draw up my finances im sure i shall use your help.
salt and vinegar - The length of time quoted was 5 years and pay £375 a month !! I know what creditors can be like and that doesnt suprise me !

Although as i stated above i am concerned regarding one of the loans and still being associated financially to my ex-wife. So i presume if i did an IVA or DMP her credit file would be effected as well ?? I also not sure what to do reagarding the consent order asking me to pay the rest of it off ? if anyone has some advice on this i would be grateful.
Niddy thanks for the link. I shall read through. I presume with an IVA for the 5years of paying it you cant get credit and will be defaulted. When its been cleared will it stay on your file for six years after ie in total 9 or am i mistaken

Thanks alot guys

[SaltnVinegar]

Re: DMP Options

Hi Batchy

What is the length of the DMP that you would be paying? With no assets to speak of, then I would suggest than any DMP that is longer than 6 years is just a waste of time.

The reason I suggest this is because if you go down the DMP route your credit rating WILL get trashed - its unavoidable. What Stepchange may not tell you is how spiteful some of your creditors may be in doing this.

So you may be aware that any bad marker on your credit file will drop off after 6 years. What some creditors now seem to be doing is to not record a default with the CRA's (even though you may have received a default notice), sometimes with only months before the 6 years is up. Some issue court claims for CCJ's (my wife received a claim with only TWO months left to go on her DMP!). This means that your credit file is trashed for a lot longer than 6 years (if you care about this).

Therefore if you have no assets, (i.e. home with mortgage, car owned outright etc), and your DMP would be longer than 6 years, then I'd definitely be considering options that completely discharge you of your debts in a shorter time frame. Yes there is (unfairly) still a stigma with some people with regards to bankruptcy, or with an IVA, but I'd say they are worth considering.

The only caveat I would place on this would be if your employment requires you not to be BR (e.g if you work in the finance industry, need certain security clearances etc). If so this would need more thought before looking at those options.

The short term hassle with BR or IVA will be completely offset in 3 or 4 years time, when taken into consideration the damage creditors could still do to you on a DMP. And theres no shame - see the thread on famous people made bankrupt (Simon Cowell for example).

Best of luck whatever you decide

SnV

[Never-In-Doubt]

Re: DMP Options

Obviously you cannot add the debt to your parents in amongst anything you may do, however an IVA May be your best bet here - read this and you tell us -> http://www.stepchange.org/Howwecanhe...rangement.aspx

[Undercover Elsa]

Re: DMP Options

Hi Batchy,
Can you clarify how much you owe in total in unsecured debt, not counting what you owe to your parents?
If it's under £15,000 then a Debt Relief Order may be a better option in your circumstances.
In the meantime, Nedcab do an excellent online Income and Expenses Calculator here>> http://mymoney.nedcab.org.uk/moneyadvice/quickfs.asp
There are hidden industry guidelines as to how much you can claim for various expenses. Once you've done it, if you'd like me to check your figures to make sure you're making the best use of these give me a shout.

Elsa x

[odetter]

Re: DMP Options

I am no expert but if you have no assets and your occupation is not affected then BR May be the best option.
I think you should wait for better advice.
The problem with DMPs is the length of time required to complete.
Defaults remain on your credit file for 6years regardless.
BR has the advantage of a clean break from your past and just a year of misery.
You'd then have the resources to look after your kids and eventually repay your parents.
Like I said wait for more professional advice.
Don't rush into any hasty decision-making.
The route you take now is crucial be cautious.