Me and my partner are thinking of doing a DMP. I just have a few questions about DMPs before I phone any companies. If someone could help i'd be gratefull.
My questions are
We have debts with Barclays, Northern Rock, MBNA, Ge money & Halifax, does anyone know whether this creditors will be unlikely to accept the offer of a DMP?
How long does a DMP take to set up?
Do you have to do a I&E for a DMP and also are there reviews of this every year like an IVA?
Does any extra overtime have to be paid into a DMP like in an IVA?
Does anyone have any recommendatins of a good DMP firm?
The creditors you mention are inclined to accept DMP's where they feel the offer made is fair. Northern Rock make more use of charging orders than many other creditors so speak to whichever DMP company you choose about your circumstances to ascertain whether this could be a threat to you.
A DMP can be set up very quickly. After a full factfind of your circumstances is done the necessary paperwork will be posted to you if a DMP is appropriate. It's then really in your hands to return the required paperwork and get the payment routine in place.
The factfind will include going through your income and expenditure. This position will be reassessed at least annually with you.
You shouldn't base a regular DMP payment upon non-guaranteed overtime. Where overtime is earned it is clearly in your interests to use some or all of it to repay debt.
Hope this helps.
Andrew Graveson
Bright Oak Ltd
UK Debt Management Company
Website: www.brightoak.co.uk
If you are a homeowner, a creditor who obtains a county court judgment against you can apply for a "charging order" to secure the debt on your property. This would exclude it from a DMP.
If your Northern Rock debt is the unsecured portion of a "together" mortgage, Northern Rock will often try to secure the debt on your property. I'm not sure if NR even need to get a county court judgement to do that.
A charging order is the result of a legal action taken against you by a creditor.
Effectively it turns an unsecured debt (such as a credit card, loan or overdraft for example) into a debt secured upon your home (like a mortgage or secured loan). If you sell the home and there is sufficient money this lender will have to be paid by your solicitor in preference to you. There are implications for remortgaging as well.
There could also be a monthly payment imposed upon you as part of the charging order by the Court.
Really it's an attempt by the lender to get some security on the debt. For example if you were to choose to go bankrupt an unsecured debt would go away but a charge upon your home (if they had one) would remain.
Are you a homeowner? If so is there much equity in your home?
Andrew Graveson
Bright Oak Ltd
UK Debt Management Company
Website: www.brightoak.co.uk
yes i am a homeowner and at the moment we are in negative equity.
Perhaps I would be better to go into an IVA, would this protect us from a charging order? The only thing that puts me off an IVA is that we only have about £200 per month DI. Also my partner is constantly earning overtime because he is a lorry driver, so will I be working out how much of that I will have to pay back to the IVA every month?
One point to pick up on here is that a charging order, if obtained, CAN be included in a DMP, but would be excluded from an IVA. It is after all only fair that all creditors are dealt with equally on a pro rata payment. If you choose a DMP as your way forward then ask the question as to whether your chosen provider would help with that debt in those circumstances, although hopefully it won't come to that.
A low DI is not necessarily in itself a bar to looking at an IVA, you can only put forward your best offer at the end of the day.
Regards.
Cert DR
23+ years in debt advice
I do not post for anyone other than myself
Speak to two or three firms and weigh up the advice that you receive so that you can make a decision with as much information as possible.
The more information you give to advisors the better advice they can give to you. For example if you are in negative equity the threat of a charging order is significantly reduced.
Andrew Graveson
Bright Oak Ltd
UK Debt Management Company
Website: www.brightoak.co.uk
Given that you have negative equity equity and a relatively low DI bannkruptcies may be the mostapproporiate options for yourself and your partner. Definitely seek advice from some different providers.
