DMP 's What's the Point

[andrewgoodman121]

Why do some people opt for DMP's , I have yet to hear of anybody who has succesfully completed a debt management plan and become debt free.
All that i have heard and read about this solution is that there are absolutely NO GUARANTEE's that the Debt interest will be frozen and many people whose Debts have increased while on these plans.

[kallis3]

Some people do a DMP because they have been turned down for an IVA and they either don't want to or cannot do, bankruptcy.

It gives you some breathing space whilst you sort out what you are going to do next and does keep the creditors away to a certain extent.

I did one for 18 months because I was told I wasn't eligible to do an IVA at that time. My creditors all froze their interest, although I do appreciate that this doesn't always happen.

Also, some companies will insist that you do DMP.

[andrewgoodman121]

I know what you are saying Kallis But i have never heard of anybody clearing there debts via this route.
You said that you were doing one for 18 months, did your debt go down or up and why go the IVA route if your DMP was being succesful as all your interest was frozen.
What made you then decide to go for an IVA

[kallis3]

I always wanted to do an IVA, but because we were in such dire straits at the time and were told we couldn't do one, at least a DMP meant we were paying money back to our creditors at an agreed rate. I wasn't going to do br as I would have lost the house and it may have affected my job (I work for the police).

We were actually just going to change DMP companies because we were charged with our original comapny, and Payplan suggested the IVA.

I did it so that I could pay off my debts sooner. With DMP, one of them at least would have taken 19 years to pay off. I'm 54 and my hubby is 61, so we're on the slippery slope anyway and I didn't want to have this hanging round our necks forever.

My debts were going down, albeit very slowly and were reviewed by the creditors every six months.

[andrewgoodman121]

This is entirely my Point Kallis,
It would of taken you 19 years to clear the Debt.
I have never heard of anybody completing these plans and become Debt Free.
The Banks must love people signing up for these Plans and Hate people getting IVA's as the Banks can't feed off a neverending Plan.
I mean how stupid is it, 19 years of so called breathing space compared to 5 years and then it's over.
Give me an IVA any day of the week Compared to that 19 years DMP.

[kallis3]

I agree, but a DMP can help in the short term by helping you get your head together.

The stress of not being able to pay your creditors, dreading the phone ringing, the postman calling and the door going if you have been threatened by debt collectors is not conducive to straight thinking.

A DMP will help you calm down and sort out what you can do in the long term.

[Andrew Graveson]

Hello Andrew,

The reasons people decide to take DMP's are very varied but some examples include:

1 - Shorter repayment period than IVA in some cases.
2 - IVA declined by creditors.
3 - Debtor cannot take IVA for professional reasons.
4 - Debtor prefers to avoid the rigidity of IVA's.
5 - Debtor feels morally obliged to repay all of the debts.
6 - Debtor perceives a likelihood that circumstances will improve.
7 - Debtor intends to release capital later to repay debt.
8 - Debtor does not meet IVA criteria.
9 - Debtor is not insolvent (eg. equity in house).

In fact the reasons would be slightly different for every one of our (and other DMP company's) clients.

DMP's a relevant and useful in the right circumstances as are IVA's in the right circumstances. That's why good IP's will sometimes suggest clients should look at DMP's and why good DMP companies very often suggest to people to look at IVA's. The most important thing seems to be that the individual concerned is given all of the information that they need to make the right decision for themselves.

[Skippy]

This isn't directed at you Kallis, I'm just using what you said as an example.

Surely if someone can't go BR (police office, armed forces etc) and has had an IVA refused then a 19 year DMP is better than losing a career? I wouldn't think it was stupid if it meant that someone could carry on with a career they enjoyed.

[andrewgoodman121]

I respect you guys answers and especially Andrew Graveson who i have actually spoken too before i opted for an IVA.
surely the most important thing is to clear the debt and get that massive Jumbo Jet off your back Once and for all.
I know it isn't easy as with creditors ringing and trying to keep them off your back, but all you are doing is giving yourself more stress,headaches, forever working out your finances on a calculator,and more importantly your finances are not decreasing by that much.
With an IVA or Bankruptcy at least you can gain a fresh start.
I know this sounds cruel but when you are in Dire Straits Something has to give!!!

[Skippy]

Yes it is important to get the debt repaid, but it's also important to be able to keep your job. If I had a career and couldn't go BR then I would definitely have considered a DMP.

[andrewgoodman121]

I know what you are saying Skippy but as i said in the previous post Something has to Give be it your Job, House, Car.
I know that your Career is important, but all you are doing is Paying for Years and Years just going round in circles paying creditors just keeping them off your back.
How would you go about clearing the whole Debt

[Viki.W]

Andrew, if your debt management company got your interest and charges frozen then your debt would reduce and eventually be paid off.

[size5]

Valid viewpoints from both sides, but for my two pennorth I have seen plenty of DMP's successfully completed.

Regards.

[Skippy]

I always wanted to join the police, and if I had done so I doubt I would have been able to go BR. I certainly wouldn't have given that up if I couldn't have had an IVA.

Also, I love my home, and if I there was a possibility I would have lost it through BR I would have looked into a DMP then.

[kallis3]

That's right Skippy.

DMP's are the right thing for some people, but I don't think we'll convince Andrew of that!