have been on a DMP now for around 2 years

[rstewa]

I have been on a DMP now for around 2 years and have managed to payback just over 9,000 backs to my creditors. Total debt left now is around 64,000.

I am considering an IVA as one of my creditors is not accepting reduced payments and is threatening to slap on a charging order if they cannot recover the full payment each month.

I approached an IVA company today but i was scared at the prospect of paying out 569 pounds a month against the 400 i currently pay on my DMP.

I pay the majority of the household bills (65%) as my i earn just under double my partners income and obvisously I pay the DMP payment.

I have read on the internet that as my partner doesnt share any of my unsecured debts at that only my percentage of the surplus income 65% (that gets paid to creditors on DMP currently) can be be considered to paying towards either an IVA or DMP.

Is this true?

I just feel like the IVA company hasnt explained this properly

[catullus]

I'm not sure that I understand your post but it doesn't sound correct.

The are no magic %'s or ratios but there ars generally some fundamental principals.

1 Based on generally accepted budgets for expenditure
you pay back as much as you can,
2 Your partner would be required to make a fair
contribution to household expenses out of her DI.

[rstewa]

Yes I agree that I should pay back what I can afford.

What I probably didnt explain very well is that as I earn 65% of the household income and therefore I pay 65% of the household bills my wife pays the remaining 35%. This is due to the fact that I take home 2300 and she takes home 1200.

Any surplus left over would be split 65-35. My wife is entitled to a share of the surplus money after household expenditure and therefore her share of the surplus money should not be available to pay MY debts. My share of the surplus money would be solely available for debt repayment.

Is that correct?

[MelanieGiles]

I can't understand why you were put into a DMP with that level of debt and disposable income. Surely an IVA would have been better from the start? What options were you given at the time, and why did you choose to do a DMP?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[catullus]

Yes, broadly what you have said is correct, but the more that your wife indirectly contributes to the IVA the more attractive it will be for creditors.

Melanie asks some pertinent questions above as to why you went in to a DMP in the first place.

[rstewa]

Hi Melanie,

At the time of my DMP my take home pay was around 1700 and Payplan basically put me on this DMP from the start paying 365 pounds a month.
My wife was earning similar income.

Since then my wife is now working 3 days a week as we have a 2 year old daughter born around same time as DMP kicked in.

My wife income is now 1200 but my income has increased to 2300 so we are more or less the same as we were 2 years ago. I have sinced raised my DMP payments to 400 a month. Have paid off 9,000 pounds so far on my DMP.

I was not advised down the IVA route by Payplan etc. I am looking at this now but was unsure of the information I was given.

My question is that should my debt repayment be based purely on my surplus income? I pay more of the household expenditure due to the fact i earn significantly more than my wife now. I have read on several IVA sites that any household surplus income would be split according to our incomes.

any advice?

By my calculation if based on my surplus income share it would be around 450-470 pounds a month not 569. Plus we are expecting a second child in January and therefore 569 pounds could never be sustained as household income will drop until my wife returns to work

[MelanieGiles]

IVA would have probably worked for you here from day one - but some companies seem to think that DMPs are the best thing to offer! I wonder whose interest they are thinking about?

With regard to your income you should only base the IVA on your surplus, but these days creditors do like to see a contribution from your spouse. So to guarantee success, I would try and make the best offer you can.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[rstewa]

Thanks for the advice Melanie.

The reason I ask this is because my wife is not happy at all with paying into these debts as they are actually mine.

She said she is not happy about contributing around 50% of her surplus income to the proposed IVA payment of 569 pounds. She would be less stressed out contributing around 15-25% of her surplus which is around £50 which would bring our proposed payment to around 460.

Does that sounds reasonable given that I have paid pack 9,000 already on a debt of 73,200. 64,200 left to pay.

[sonyse2t5]

I worked out it will taken you 15 years to pay off 73,000 on £400 per month from day one. Didn't anyone tell you this?

Again people are misadvised about all their options -CCC and Payplan will aways recommend a DMP for anyone as they are DMP companies for free!But they are not for huge debt like yours.....

You have been on a DMP for two years, I am curious - have all interest been frozen as I'll be surprised if that have happened? If so you are lucky sofar.

Without further delays..I recommend you speak to a IVA company. If your IVA fail then continue your DMP. You have nothing to lose.

Regards

[catullus]

Let me dispell a myth!!

CCCS and Payplan are not free!! They both get a "backhander" proportionate to the amount of money that they collect from the banks.Although CCCS is a charity, when I looked at their last set of accounts, out of a turnover of about £14m, only something like £25000 came from charitable donations.

These organisations are dependent upon lenders for funding and never appear to champion the cause of the consumer debtor. On the current spat between IP's and the banks they have been remarkably quiet. Strange for such large organisations that purport to represent the interests of consumer debtors.

They have also cleverly introduced statistics to suggest that only 3-4% of people that they advise are "suitable " for an IVA. That % sounds very low to me and when they refer to suitability I often wonder from whose point of view.

[rstewa]

Yes all interest has been frozen on credit cards. The Interest on the loans is has already been set out in the agreements.

Yes I have been lucky so far with that and have had little correspondence from them over the last couple of years.

I am in talks with an IVA company now for a payment of around 470 pounds a month. so hopefully this payment will be accepted by creditors.

This will end up paying back 27000 on top of the 9,000 i have paid through Payplan totallin around 36000 or so.

does this sound agreeable?

[MelanieGiles]

With regard to your wife's position, your creditors will feel that as she has probably benefitted from the monies you have borrowed, that she ought to bear some responsibility for their repayment.

The choice is yours - neverending and unprotected DMP or 5 year IVA!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[sonyse2t5]

Hi
let your IVA firm look after you. End this CCC arrangement...I did 2 months with them to appease creditors....then IVA out of the blue!

I suspected CCC was getting "backhanders" from the lenders as Catullus pointed out. If they suddently told you to do IVA the lenders will reduce that ££ cut they get.

The Citizen Advice bureaus are the only truely independent charitable organisation as they take a hardline on the banks as taking advantage of debtors.(Payment protection,excessive charges racket)

[rstewa]

I understand what you say about my wifes position. But these debts are caused by gambling some years ago and consolidating those debts.

They didnt bring my wife anything at all.

The IVA firm said that the minimum we can do it on is 450. So I said to base it on 450-470 and then I will look to see if we can push it up further if its agreed over time.

I have 6 monthly pay reviews so I will at least contribute 50% of those if i get any. Plus I have a bonus every 3 months (based on performance) which is around 200 pounds net to I can also contribute half of this as well.

I dont want my partner paying for debts that she didnt sign or not benefit from. She is paying around 40% out of the surplus household money and I think that is more than enough from her.

[rstewa]

For the record I am not addicted. I just got carried away using big money.

this was over a course of like 3-4 months. Dont even gamble 1p away.