DMP 's What's the Point

[Andrew Graveson]

Interestingly attitudes towards bankruptcy are softening in some professions. For example Police Officers can and do go bankrupt these days and remain in the service but there are implications for promotion, reputation, and also participation in certain sensitive teams.

I do entirely see where Andrew is coming from with his general point but thankfully most DMP's are likely to last a lot less time than 19 years.

[andrewgoodman121]

I can fully understand that if you are in the Army or Police Force you would try to avoid at all costs going Bankrupt.
Shouldn't the Law be changed that someone who wants to clear there debts in an IVA can still be a part of those services, even in the Banking Industry.
If you enter a DMP you are doing so to save your job why can't this be the Case in an IVA.
I mean you are paying monthly sums into it for a set period of time.

[kallis3]

I agree with Andrew Graveson that if you are already in the police you probably would keep your job, but you certainly wouldn't be able to join. Most forces say 3 years after discharge and they class IVA's the same.

I don't think the law has much to do with it - it's the way company bosses perceive people who are insolvent, as a greater risk than those who are not (or who have the appearance of being solvent!)

[Vincent Bond]

I think this is a great thread which hopefully will help people looking for solutions to make a clear informed choice on what is right for them.

Your objections are quite valid Andrew but as you can see from some of the responses here there are some situations which benefit from a temporary fix which for many people is what the DMP is. As mentioned earlier here many DMP's are not likely to last the full term but rather deal with the creditors while a person's situation improves.

Another example of this is homeowners with significant equity who would almost certainly lose their home if they went bankrupt, who have rising monthly mortgage costs due to the current climate and who cannot release equity as they cannot remortgage.

After unsuccessful attempts at selling their property people turn to DMP's as a temporary fix until they are able to sell or until their financial situation improves. Maybe there is to be a job change in the near future, maybe key expenses will reduce in the near future.

Also some people who have lower debts are able to complete DMP's in the same amount of time or even less than an IVA.

I think DMP's play and important role and are right for some people, though clearly not all.

[size5]

My own view is that to dismiss DMP's as worthless is quite quite wrong. It is estimated that, for every IVA proposal, there are between 7 to 9 DMP proposals, and a lot comes down to choice in the end. Things are very rarely black and white.

I have dealt with many, many non-homeowners who have no assets who have chosen an IVA as their preferred route rather than bankruptcy. Financially they are very foolish, on the face of it, to pay back over 5 years at a rate largely determined by creditor guidelines which are, in my opinion, quite mean rather than look at BR where if they pay anything at all through an IPO it will almost certainly be much less than the proposed IVA payment and will only last for 3 years.

Does that mean those people are wrong? Far from it, just wanting to do what they think is right. Similarly, there are many people who would financially benefit from NOT looking at a DMP, but to dismiss them out of hand as being foolish because of their desire to do what they think is right is a little harsh.

It is also true that a DMP offers no cast iron guarantees, but creditors, to give them their due, are usually very good in that area provided it can be proved that a client is making every reasonable effort to repay them.

Regards.

[Adam Davies]

Hi
There is no one product fits all in insolvency,that is why it is so important to receive the best advice.
DMPs have a big part to play,for the reasons stated by the experts.
Just on a side note I was talking with someone who is in a debt management plan with the CCCS and she has never had to prove her income,only her debts even though she has been paying for over two years.
Does that sound right ?

[size5]

It is true that a DMP doesn't delve anywhere near as deeply into things like wage slips, bank statements, rent/mortgage agreements etc as an IVA does, but it is a very rare case indeed where a client would call you for advice and make blatant mis-representations as to their incomings and outgoings. There are also either 6 monthly or annual reviews to determine whether a clients circumstances have changed or not.

Regards.

[andrewgoodman121]

There seems to be so many flaws in a DMP and it's true as it is only a quick fix solution.
I don't like the idea that nothing is set in stone such as the Freezing of Interest and a Set Period of time till you become Debt Free.
The Creditors can pull the rug from underneath you at anytime and if you are a Homeowner it is obvious that you will do anything to avoid Bankruptcy,

[size5]

There is unfortunately, as Andy says, no one solution that fits all. There is no guarantee, for example, that an IVA proposal will be approved, or if it is approved that it will run its full course without failing. There are many threads on here regarding failed/failing IVA's.

Ultimately, from my perspective, you can only outline all the options and allow the client to make their own mind up. One thing is undeniable, however, and that is that for all its perceived flaws, and I make the point again that the vast majority of DMP's work perfectly, interest frozen etc, a DMP is by far a better option than carrying on using and obtaining more credit.

Regards.

[kallis3]

It works for some people Andrew, and that's what counts.

You and I are lucky that we are in an IVA, some people don't have that luxury for whatever reason.

If it keeps the wolf from the door, even temporarily, then it's great.

It might make all the difference to getting your life back on track.

I don't think we are ever going to agree on this one!

[Andrew Graveson]

Hi Andrew,

Agreed that there appear to be technical flaws in DMP's. These technicalities are often pushed by those who seek to sell other ways to deal with debt. However very few people are affected by them when they come to enter debt management plans.

This site is full of stories regarding the negatives associated with IVA's or bankruptcy as well. None of these solutions are perfect in themselves; it's a question of matching the pros/cons to the individual circumstance and attitudes of each person seeking a solution.

I have spoken with an iva.co.uk visitor this week who regrets having taken out an IVA and feels the company concerned should have explained DMP's before the IVA went ahead as it would have suited better.

As Size5 has pointed out previously those of us who work in the DMP area know that in reality things generally work out well for all concerned. There is more certainty with an IVA or bankruptcy; and there are different negatives to accompany the certainty.

Different strokes for different folks!

[Skippy]

I've said before that I didn't even know what a DMP was when I went into my IVA. Although it wouldn't have been practical due to my level of debt (it would have taken me 29 years providing interest was frozen), it would have been nice if it had been explained to me, and the same with BR.

In my opinion for what it's worth, it's each to their own. People must have all the options explained to them, and then be able to go away and make an informed decision. If I'd decided that I'd wanted to go into a 29 year DMP, providing I knew all the ins and outs then it's my decision.

[moretolife]

truth be told...we werent told anything about BR or DMP...we rang initially and asked about an IVA and only ever talked about that...i didnt have a clue before we got it approved...i know more 2 years in than i did at the start...we were so naive
but having said that....it would have taken 17 years or so before we would have been debt free and we may not live that long.!!1...so happy with what we are doing
i do hope that everyone who is struggling gets the full alternatives from every agency so they can make an informed decision rather than one fueled by panic....

[size5]

All these points are tremendously valid and it really does illustrate the need not to "panic buy" as it were, taking time to look at 2 or 3 people, visit www.iva.com etc. Granted, though, that not all people will have the good sense to log on here and see that for themselves.

Regards.

[kallis3]

That's right - I was already a good way down the road before I stumbled across the site. As it happens, Payplan have been pretty good and I have no complaints about them.

Although we were already in a DMP, we did have everything explained to us about all our options.

I agree though size5 - people are usually so desparate that they will grab at any lifeline thrown to them, regardless of whether there is a shark or benevolent fish on the other end of it!