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by Bakersue6543 » Wed Aug 22, 2018 7:28 am
Hi, I am about to commit to an IVA but having some last minute wobbles and sleepless nights. All debts (40k) are in my name and I have about £165 to offer creditors each month. StepChange seem to think this is realistic, however when I speak to creditors to advise that I will be unable to make the next payment they seem very keen to get me onto a DMP - I have googled, asked StepChange, Experian and our current mortgage advisor about the different impacts each would have on our ability to (a) transfer with same lender into a new fixed rate in 4 years time and (b) remortgage post-IVA and everyone seems to be giving me conflicting information... is just because it is not possible to give a specific answer or would anyone here be able to clarify for me? StepChange told me not to tell creditors I was specifically looking at an IVA. Thanks very much for any replies. x
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by Ryan » Wed Aug 22, 2018 7:36 am
Hi Sue,

It will depend on if your existing Lender would need to credit score you as to if they will offer you a new rate or not - some will some won't unfortunately. Entering an IVA normally means that you couldn't re-mortgage to a High Street Lender for at least 6 years from the start date. A DMP can have a longer impact on your ability to re-mortgage as the Creditors don't have to default the accounts at the start of the DMP (unlike an IVA) so that can lead to issues on your credit reports for much longer than the 6 years of an IVA.

I hope that helps.

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by Foggy » Wed Aug 22, 2018 8:25 am
Another reason creditors will push for a DMP is that, at the end of the day, they get more money and pay less fees, as well as retaining the right to enforce full payment at any time they wish. Also, they do not have to freeze interest.

Say you can afford £200 a month and they do freeze all interest in the DMP --- it will take you nearly 17 years to clear. An IVA will take 5 or 6 years. Yes, it is harder and much more financially intrusive and with many more hoops to jump through on the way, but definitely doable with the right mindset.
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Lisa Thomas
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by Lisa Thomas » Wed Aug 22, 2018 8:45 am
DMP is not legally binding, the debt will have to be repaid in full, interest may not be frozen.

Try not to worry about it - your Nominee would not have put it forward to creditors if s/he could not recommend it.

Best of luck for the meeting.
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