How much disposable income is considered too much to take out an IVA? Is there a rough figure? On paper I look ok but the fact is I'm taking out payday loans every month which are taking up my disposable income.
If you can repay your debts in full with interest and charges stopped in less than seven years a debt management plan may be a better option than an IVA. There is no yardstick but an insolvency firm will discuss all your options and you can then decide on what is best.
It really depends on the individual case but many creditors prefer DMPs if they will be repaid in a timescale not much longer than an IVA. However if there is legal action pending or debts to HMRC then a DMP would not afford the protection of an IVA so would not be suitable.
If a client does have the ability to repay within seven years then if their situation improves they could actually be debt free in under five. However this assumes interest and charges are stopped and there are no DMP fees to be paid so a number of things need factored in.
Ultimately it is down to the individual and what advice they receive at the start. The client can then make up their own mind having weighed up the pros and cons. It is not an exact science by any means.