stick withdebt management program or do an IVA?

[lisa.s]

Hi
I am currently undergoing a debt management program and my advisors have advised an IVA is a better option for me. I am living with my partner but classed as a lodger as I am not on the deeds nor do I pay towards the mortgage. I just contribute £100 per month and we alternate shopping bills.

We are getting married this year. Obviously I want to change my name to my partners name when we do. However I am worried that if I do this his credit rating will be affected anyway and if I do take out an IVA will he end up being involved and I do not want him to be as it has nothing to do with him.

I really don't know what to do, ie stick with my debt management program or agree to an IVA application.

Thanks
Lisa

[Andrew Graveson]

Hello Lisa,

How much do your debts amount to, and how much do you pay towards them each month?

This information will enable other posters to give you views on whether an IVA will be a better route for you.

In terms of an IVA, if it is the best option for you, don't simply settle on the IP that is being presented to you. There are many IP's out there who could handle an IVA for you if it's the right thing to do and as always there are good and mediocre amongst them.

[johnz]

Your partner can disassociate himself from your debts. That what my husband did. He just has to contact Experian and Equifax for the forms.

[Lisa2009]

It can also be done online too. I emailed them and asked to be disassociated from hubby's. We recieved a letter within the week confirming it was being done.

mrs skint

[lisa.s]

Thank you for your responses.

I already have a debt management account with my IP and pay them £450 per month which they distribute to my creditors. I signed up with them in October (end of). My debt currently stands at about £45k.

They have told me that living with my fiance may pose a problem and I have done so for nearly 3 years. My name is not on the mortgage or the deeds. They said that they would class me as a lodger otherwise they would have to take my partners income, house equity and bills into account. The thing is, when we get married, I can't really be classed as a lodger can I?

Also, they said that an IVA is better because it runs for 5 years then whatever is left is written off and I have a clean slate and my credit reference will be fine again, and if I stay with debt management program it will take longer to pay the monies back (I worked out on current amount roughly 9 years if I don't get in a position where I can pay more) and my credit rating at the end would not be as good as it would be on an IVA. I do remember when I started this that the advisor at the time said that the debt management builds credit rating back up.

I would have thought that creditors would be much happier if I paid all monies back and I would be more trustworty if I want to go on mortgage later on. (ok they have taken interest off so they would not make any money from me) whereas on IVA they wouldn't get it all back. I would feel a bit guilty not paying it all back to be honest.

Or do I have that totally wrong?

[MelanieGiles]

I would take advice from a company that clearly does not have a conflict in wanting to hang on to you as a DMP client. If you want to propose an IVA, then that is what you should do.

[J-DOUBLEYA]

I agree with Melanie. How can a DMP - which effectively means that you are making payments that are less than the contractual agreement, possible enhance your credit file or rating ?

I think I would get another opinion on your available options .

[lisa.s]

They are trying to get me to agree to an IVA not stop me. It is me that has the doubts not them.

It is me that thinks surely my rating would be less affected by paying the whole debts off rather than having a lot of it written off as the creditors would then have all the monies back.

Or have I got it totally wrong?

Thanks

[MelanieGiles]

Once you have default notices registered at the credit scoring agencies they will stick for six years, so I cannot see how a DMP brings you any advantage over an IVA - unless you are able to pay the creditors in full within a five year period.

[Cybus]

I agree with Melanie on this point. I would contact a Licensed Insolvency Practitioner and seek there advice.

£450 seems a lot to be paying for debt management ... in my opinion. How much has been paid to your creditors from the money you have paid and how much have they taken as fees from that?

You advise that they say an IVA is better. I am therefore at a loss as to why you are in a debt management plan.