We are worried sick

[r_d]

Hi This is all new to us but can you offer any advice. My Husband and i have contacted cccs regarding our financial problems we owe approx 124,000 in unsecured debt and our annual income is 57,000. our avail surplus is approx 1300.00 per month. We were hoping for an iva arrangement, but after going through our details today we have been told we have too much surplus income and that our best option is a dmp. They are going to call us again tmorrow. Have you heard that sometimes people have got too much surplus income.
The ip has said that this is good news and that a dmp really is the best option as it will take approx 8 yrs to clear all debt, less if we pay any commission or bonuses in to it. We are worried sick as we have only just come to terms with the debt problem and plucked up the courage to go for an iva.

[andymac]

Hi there,

it seems that having too much surplus can only be a good thing, many people here have the complete opposite problem.

Speak to a few other IP's to get a balanced opinion of what you should do.

[sonyse2t5]

Hi,

I would really advise you against the DMP option. Pay 100p to the pound in an IVA so your creditors can everything back.

No lender will freeze interest for 8 years - I have not read a post from here or anywhere to say they will freeze interest for more than one year - you will be asked to do consolidatory loans with interest- HSBC and TSB are favourite to do that approach.

As you have surplus income, creditors can say you can afford interest!!

In the UK DMP is a voluntary arrangement unlike in Scotland where legal protection exist. 8 years is a long time to deal with creditor changing stances...every letter these lenders send out on agred DMP say the interest freeze is a temporary arrangement...INTEREST will BE ADDED when you get cosy Your 8 years could be 10 years....possible or more....

I hope NR is not on your creditors list...they aren't all that receptive to DMP.

Try to aviod the DMP. if you must do DMP try CCCS, but even they have little power to make creditors freeze interest in the long term....

Think carefully on this please

[iva experts]

Welcome to the Forum r_d,

I would advise that you contact at least 2 or 3 companies for advice regarding your debt situation. This can then bring reassurance or cancel out any ill advice.

Usually individuals with such a high debt amount would not be advised to do a DMP as it would take an incredibly long time. In your case you have a high disposable income, you could still try at proposing an IVA but make sure you do your homework before committing.


Best Regards,
IVA Experts
http://www.iva-experts.co.uk/

[MelanieGiles]

What curious advice! A DMP is a better option for whom? 5 years versus 8 years - and no guarantee that creditors will stop charging you interest and no protection from the ongoing action of creditors? Makes me wonder!

I suggest that you take advice directly from an insolvency practitioner as to your options, and then decide what is better for you. I personally would never recommend a debt management programme to clients who are clearly suitable for an IVA. It is up to your creditors to then decide if it represents the best option for them.

Do you own a property with equity in it perhaps, which is making CCCS believe that you have too much money?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[lily]

Hi and welcome

I was in a DMP and all but one of the creditors agreed to the reduced payments, however they continued to call and always wanted to up the payment as the call centre staff get more if you pay more, in the end I decided that I was no better off than I was by talking to the creditors myself.

With an IVA you are legally protected from the creditors, you have a definate time scale that is five years and they are legally bound as you are to stick to the payments they agreed to. The only one thing which you should consider is the equity release in your home, which of course wouldnt be affected by a DMP.

Good luck, you are amongst friends on this site, who have been through what youre feeling right now.

kind regards

lily

[lily]

Hi and welcome

I was in a DMP and all but one of the creditors agreed to the reduced payments, however they continued to call and always wanted to up the payment as the call centre staff get more if you pay more, in the end I decided that I was no better off than I was by talking to the creditors myself.

With an IVA you are legally protected from the creditors, you have a definate time scale that is five years and they are legally bound as you are to stick to the payments they agreed to. The only one thing which you should consider is the equity release in your home, which of course wouldnt be affected by a DMP.

Good luck, you are amongst friends on this site, who have been through what youre feeling right now.

kind regards

lily

[sonyse2t5]

Just want to add,some lenders will ask if you have house(MBNA for one) or search for it on the Land registry....a crafty trick by lenders is to after a year or more on a DMP - stick a Charging order on it to secure their debt on your Property...

So you property can come under seige whilst on a DMP..they may(NR)/ others may not make you sell it...but if they secure an interest on it...

Uncertainty....no one wants that for 8 -10 years!

[lily]

There is one other reason why you may have been advised to go for the DMP route, that is Northern Rock, they seem to have a policy of rejecting IVA's if they account for more than 25% of your debt. A lot of IP's will not bother to propose due to the stance of this creditor.

lily

[r_d]

Thanks for your advice we really are totally confused now. We dont understand why cccs have said this. NR is not one of our creditors We owe 42k to lloydstsb,16k mbna,Egg 15k,mint 11k rbs 5k,cap1 6k m&s 11k a fiat personal car loan 3k adams card 5k then various small amounts like next 400.00 catalogue 300.00. We do have our own home worth 180k but we owe 155k on mgage and secured loan. CCCS said we would end up paying more back on an iva due to equity release clause after 5 yrs. What do you think we should do ask 3 of the loans finish next year anyway.

[iva.com]

Hello r d,

The advise that you have received seems to be very unusual. As some of the other posters have advised, seek the opinion of several IVA firms then make a decision as to which path to take.

You might find our web site useful for locating IVA firms. We maintain a list of IVA firms and Insolvency Practitioners. We also publish client reviews of the services provided by them.

Good luck in finding the right solution for you. Please let us know how you get on.

Kind regards,
Terry Balfour
IVA.com

IVA.com - The IVA Comparison Site
100s of reviews, All IPs and IVA firms rated.

Use our IVA firm comparison tool to find best IVA firm for you:
http://www.iva.com/iva_comparison_1.asp

[lily]

If I were you I would speak to Melanie, she has lots of experience and she will give you a personal touch. Some of the glossy advert companies work on quantity and you might not get the quaulity personal touch, speak to a couple more companies and include Melanie.

Good luck, with everything

lily

[catullus]

Hello rd

This is an interesting one and in many ways is affected by how you see property prices moving in the next 5 years.

Based on the contribution that you say that you can afford you would pay in £78k over the life of the IVA (probably more with inflationary rises etc), knock off £8k for costs leaves £70k to go to your creditors before the equity release.

At the moment you are pretty well mortgaged up and so in year 4 you will be required through a remortgage to release 85% of any increase in value from now. I calculate that your property will have to rise in value by about £64k over the life of the IVA before you are in the realm of paying off your creditors in full. But even if you have to do that, is that actually a bad thing?

Personally I think that an IVA is the right course of action for you because it will give you the certainty that you have got a debt solution in place now which will work, if you stick to the IVA.

You also need to understand that VERY FEW DMP's complete because of their informality meaning that the debtor will almost always default on the DMP at some stage in the plan, causing interest and charges to roll again.

CCCS are funded by the banks and take the banks view that less than 3% of debt problems are appropriately dealt with through an IVA.

I do not agree with them and I think that your case proves the point, but it does depend on how you see things going over the 5 years, your age etc etc.

I would strongly recommend that you consult an IP from an independent practice to take a second opinion, because there will be many other factors that could affect the final decision, and I will be interested to see other posters views on this.

Hope that helps a bit.

[Adam Davies]

Hi
I would agree with Catullus,s and Melanies posts.
A DMP will not be a guarantee to conclude your debts in 8 years whereas an IVA will,after 5 years.
Just be aware that you will have to release equity in an IVA but not in a DMP
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp