Am new to all this as I have only just admitted to myself that I have serious debt problems.Have spoken to an IP (learning the jargon already)and understand I may not qualify for an IVA as I only have two creditors - will speak to the IP again next week.
However I am still confused with the other alternatives i.e. bankruptcy or a debt management plan.
Find the thought of going bankrupt quite frightening - so my question is what is a DMP and how does it differ from an IVA.
It was explained to me on the phone but am not much of a bright spark and have got totally confused as to what to do
A DMP is where you offer your creditors what you can afford to pay each month until the debts have been repaid in full. It is not legally binding and there is no guarantee that interest and charges will stop although in practice they normally are. Your money is distributed pro rata among your creditors meaning that if Lloyds are half your debt they receive half your contribution whereas a small catalogue debt will only receive a small amount. Given that you only have two creditors it may be possible to do this yourself without incurring the costs of a professional debt management company.
Creditors would always prefer a client to make a direct offer of settlement to them, and with only two creditors I would definately give that a go first.
You might like to visit www.debthelpcharity.com which provides a self-DMP pack which you could try in the first instance. If this does not work, then you may need to resort to the services of a professional.
If not, if you visit www.iva.com, there are several companies on there who will assist you do a DMP.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
When I admitted my debt problems the idea of bankruptcy was absolutely terrifying to me, I have since become more informed due to forum members experiences and it is a big decision but I don't think its quite as scary once you get some advice from people who are bankrupt.
I decided to enter into an iva, but I am sure some bankrupt members of the forum will offer advice of their own personal experience[:)]
Good luck
Be positive & look after yourself, there are more important things in life than debts....
Hi there Gordon - my hubby was in an IVA, but that failed so now he is BR. Like Emma says the thought of it was terrifying, but after doing some research and getting tons of advice from this forum and others, BR was the right way for us. The BR was only granted on Monday so very early days, but if I can answer any of your BR queries I will be glad to do so.
If your debts can be managed through a DMP that is still an option for you. Depends on the size of the debts, I suppose.
I would definitely get free expert advice, to make sure the decision you make is right for you.
