I really dont know which way to jump!!!

[steven.m]

I am currently on a debt management plan with debts of over 50K. Is it worth switching to an IVA to get this debt paid off more efficiently?
I really dont know which way to jump!!!

[MelanieGiles]

Hi steven and welcome to the forum

It depends on how much you can afford to pay your creditors each month. How much are you paying into your current DMP, and who is this being managed by?

If you are likely to complete your DMP within the next 5 years, I would stick with it. If not, then you might wish to consider proposing an IVA as an alterative as this gives a more certain outcome for you.

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

[steven.m]

Thanks for responding so quickly Melanie!
My DMP is managed by Spectrum and costs me £35 a month paying off 17 creditors. £1 a month to the creditors and the rest to Spectrum, who also charged me a fee up front for their 'advice'.

My DMP isn't anywhere near likely to finish in 5 years and a final outcome with spectrum seems a long way off.

[MelanieGiles]

Hi steven

This is a crazy DMP - is it right that you are only paying £1 to each of your creditors and you owe £50k! I think your money would be best spent by saving up for a bankruptcy application and getting rid of this debt once and for all. The only people winning here are Spectrum.

Do you have any assets which would be at risk under bankruptcy proceedings? House, car, investments, shares?

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

[steven.m]

yes Melanie I do only pay £1 to each creditor.
Bankruptcy relly worries me as I have two young children and the only thing I have to cling to is the house i live in...I also have a secured loan attached to the property which is at approx £35k.

i have a car on an HP agreement which is due to end next year..the car is worth about 4-5k.

[MelanieGiles]

How much equity is there in the property? I am guessing not much if you have a secured loan.

With regard to the HP on your car, this is not necessarily lost in bankruptcy so long as the HP company agree you can continue to make your payments.

With £50k worth of unsecured creditors, these balances will be increasing by the day, as £1 per creditor doesn't even cover their internal admin charges.

May I ask how you got in so much debt, with so little disposable income?

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

[steven.m]

the debt is belonging to both my wife and I, the 50k is both of our debt lumped together.

in answer to your question.. i have no idea how the debt mounted up so quickly although i guess it was mainly borrowing from once place to pay off another, sadly there is nothing to show for all the debt at the end of the day apart from a few grey hairs.

You are right about equity in my property,taking into account the mortgage and secured loan i am guessing a figure of £15-20k would be all that would be left.

With regards disposable income, there is very little left each month from my full time and my wife's part time wages..i think its what's called the bread line!!

[freelili]

Steven

I am really sorry to jump in but spectrum have been on watch-dog. I have just skim read but spectrum are not going to help you. melanie will advise you better than i ever could, I know that this company are bad news though. If it is possible get away from them. I am not an expert just another person in debt,

LILY

[steven.m]

thanks for the advice Lily, I agree about Spectrum albeit a litle too wise after the event..but hopefully not too late.

regards, good luck with your issues.

steven.m.

[freelili]

You are most welcome,

Hopefully you can move forward soon

Thanks my issues are hopefully soon to be solved

isnt being in debt a piece of cake when you got maggots like this around? lol

LILY

[MelanieGiles]

Stephen

If I were you I would get that property revalued, to see if you could raise some equity to offer your creditors via a full and final settlement based IVA.

On the figures you have presented this may be possible, alternatively you could look at consolidating your current mortgage and secured loan to see if this will release some additinal money which you could offer to your creditors in a much more structured fashion - ie an 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

[steven.m]

The house across the road was under offer at £157. How would we fair with the secured loan and mtg as would only release about £20k if we are lucky?
Would we do IVA through Spectrum or someone else?
If someone else, how do we break our T&C's??

Thanks

[freelili]

You can choose who you do an IVA with but spectrum have been highly critisised on watchdog. Lots of people have been mislead by them.

Good luck with what you decide.

LILY

[steven.m]

Thanks, is very frustrating as obviously in some difficulty and they seem to take advantage of that...even charged us £1500 to go with them!!

Thanks for your advise and help though

[freelili]

Another one of our members also paid them a fee to go with them 'scaredkez'. The day after they were on watchdog. She pulled out, even though she lost the money. I know its frustrating, they are feeding on your vunerability and the fact that they are charging this fee makes people stay with them. If you phone around 3 companies just to see what your options are and get a feel for what should be happening, I am sure you will find spectrum fall far short of the mark. It makes me mad (£1500) what for? I know which way I would jump, steven.
I wish you the best of luck with this.

LILY