Is a DMP less damaging on your credit files?

[lonely]

I'm in the process of arranging a DMP and I know that once you default, it's shown on your credit files - but what exactly is shown and for how long?

If you were on a DMP, would a default notice appear against each creditor for the term of your DMP, then for six years after that? Or like an IVA is it just six years from the start?

Also, if you default on a debt, does each time you pay a reduced payment count as one default (so in effect you could default 60 times on one loan which you are paying off over five years)?

I would appreciate any advice.

[lonely]

Can anyone help? I would really appreciate it.

[jamesfalla]

Lonely

You are right, when you enter into an DMP, all of your creditors will sooner or later issue default notices against you which will be recorded on your credit file. These will prevent you from borrowing until the account is settled in full which will thake as long as it takes. Only then will your credit rating start to repair itself.

In contrast, with IVA & Bankruptcy, a notice of the procedure will be added to your account which will prevent you from borrowing until the procedure is completed and the debts satisfied. The notice will remain on your file for 6 years from the date when the IVA or Bankruptcy is put in force.

James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions for over 10 years.

For more information visit www.jamesfalla.com and visit my blog at: http://jamesfalla.blogs.iva.co.uk