www.iva.co.uk

I am curious, in most cases cited in this website, the advantages of an iva is obvious over a dmp as it takes 5 years and not 9 or even more years as it has been mentioned. But what happens in theory if the finishing period between the two payment options are possibly within a 12 months gap, that is a year longer,for say dmp - can creditors reject the iva proposal assuming a good dividend return of over 45p on the grounds that the debtor might as well just pay the extra year to complete the debt payment???

Good morning,

DMP is a better option for people who have lots of equity in their properties but do not want to remortgage or take out a secured loan.

If you owe money to only one or two different companies, dmp is again a better option.


One of the disadvantages of DMP is they are not legally binding so creditors do not have to agree to repayment schedules. So you really do not know if your dmp would only be 1 year longer than 60 months or not.

However, if the arrangement works well the creditors will be happy to co-operate.


Kind regards,

Julia Simavi

Shortlisted with special commendation for Debt Counsellor of the Year by Credit Today Awards 2007

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Yes the creditors can reject on that basis, and will make a commercial decision bearing in mind the merits of each individual case.

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

I agree with Melanie, creditors may well reject an IVA proposal on the basis that the full debt could be repaid within a similar timescale using a DMP. Generally, if you can pay back 100% of your debt within 5 years using a DMP, then creditors will favor that option.

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