Who do I listen to?

[jinxed]

I have debts of £36000 which I inherited when I was divorced. I have been paying £200 pm for the last three years on a DMP. My balance is hardly touched after all this time.
So, today I had an initial telephone assessment and of the three options (another DMP, IVA or BR) I think I am going to go for the IVA.
What worries me is that the assessor said I would be required to pay almost £350 pm and that I would reduce my final debt by £15000 leaving me almost £20000 to pay over 5 years. I have no assets at all.
I have an income of £1200 which is from a medical occupational pension and Incapacity Benefit. I suffer ill health (obviously) and I am afraid to commit to this repayment for 5 years.
I am really not trying to squirm out of my debt, I have after all, been trying to pay it off for some time, but I am not reducing the debt this way.
From what I have seen on this site other IVA eees are almost halving their debt balance and making smaller payments..........maybe I am mistaken but is the information I was given correct??

[Andrew Graveson]

Hi jinxed,
I think that where an IVA is available and affordable that it generally offers a better solution than debt management. Perhaps a surprising statement from someone involved in debt management but true nonetheless. Even if interest and charges are frozen it would take 15 years to repay your full debt in a DMP.
Affordability is very important. If payments of £350 are not viable then this is not the solution for you unless another IP were to assess your case in a different way. If that cannot happen then perhaps bankruptcy could be reconsidered?
You might choose to discuss this with one of the IP's that posts on this site in order to get a second opinion on a possible IVA.

Andrew Graveson
Independent Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[MelanieGiles]

How can these firms say that you need to pay £350 without taking account of your individual circumstances? You are right to be wary, and personally I would find someone who gives you advice on all options rather than just one.

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

[catullus]

Did the assessor go through an income and expenditure account with you? If so, have you seen it and do you agree with it, comparing what it says to your actual circumstances.

It's important to understand that within an IVA you pay in to it what you can afford, not the lowest amount that the creditors will accept, and the I&E account that is prepared for you is critical to deciding affordability.

It's important to get that I&E account as close to reality as possible but the assessor will guide you on certain categories of expense that are pretty well set by creditors and only exceptional circumstances would persuade them to accept a different level of expenditure.