Following a variety of changes in circumstances (pay cuts, health problems, new baby) I am currently on a DMP paying just over £100 pm. This on debts of just over £50k.
At the moment I have two jobs and have just been told that the end of the contract for one is being brought forward by two years to next March. From this point, unless I can find equivalent work, I will not be able to pay anything to creditors.
Between the payment I will get for the contract ending early and some money I can access from a mortgage reserve I will be able to raise between 8 - 10k.
Do you think that my creditors would be likely to accept this as a one-off payment and, if so, would it better to offer this informally or through an IVA?
After fees you may be offering around 10p/£. Depending on your creditors this might well be an acceptable offer, but only when compared to their alternatives in Bankruptcy. For that reason I'd suggest that you speak to a few IPs and get some personal advice.
IVA.com lists many of the larger companies - talk to a few to get a couple of different angles on the situation.
Thanks for your replies. I don't really know how we would manage but hope that my husband could get some part time work to fit around my other job (at the moment he is at home looking after the baby). My concern is that we wouldn't be able to maintain the DMP payments and would start getting all the hassle from creditors again and for my own peace of mind (I have a history of mental health problems that have been exacerbated by the worry about the debts) I would like it all over.
I realise it's a low offer but can't foresee us being able to offer any more either through a lump sum or monthly payments in the current climate (my employment is funded by grants from public sectors, which has been cut, hence the contract having to end). Have any of the experts had such a low offer accepted? Would I better offering it informally intially as I understand that going through an IVA would involve IP fees being deducted from it?
With regards to the comparison with BR, my share of the equity in the house is around £6000 and I have no other assets.
I would be prepared to put an offer forward if you were able to come up with £10k. This would give a return of around 15p in the £ which I certainly have had accepted in the past - but do ensure that you will be left with enough to live on until he does find a replacement job.
I would definately recommend that you use an IVA to make the offer, as this only requires a majority of 75% of creditors voting and will bind in dissenting creditors. It also means that the decision has to be made on a set date, so you would not be kept hanging around waiting for individual decisions to be made.
Thanks for that Melanie. Once I have more of an idea of what is happening I will certainly be contacting some companies for advice. In the meantime, what sort of paperwork will I need to be getting together?