Would I be better with DMP?

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michael963
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by michael963 » Mon Nov 05, 2018 3:18 pm
I have had a quote for an IVA of debts of 32,000 and the costs are about £6,000 I think I will be better with a DMP or deal with the debts via the court.
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kallis3
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by kallis3 » Mon Nov 05, 2018 4:39 pm
You need to take advice from several companies to seek the best route for you. With a DMP you may find that interest and charges are not frozen and it will take a lot longer to clear.
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Foggy
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by Foggy » Mon Nov 05, 2018 4:49 pm
In a DMP you will keep paying until the full debt is paid. Say you can afford £300 a month (for the sake of maths) ---- on, say £30k, this would take nearly 8 and a half years, IF all interest is stopped, longer if you use a fee charging firm. Creditors do not have to freeze interest, or agree to the DMP and can still chase you or send the bailiffs in.

In an IVA, assuming the same £300 disposable income, you would pay, if you agree to a 5 year IVA , £18k (plus an extra year if you are a homeowner and unable to release equity).

"Through the courts" --- I assume you mean bankruptcy. For this you will have to pay for 3 years at a similar level to the IVA or DMP (basically your agreed disposable income).

In an IVA or BR the costs will come out of your monthly payment NOT be in addition to it, and is effectively covered by the creditors not you, unless you manage to pay back the full debt -- which does sometimes happen (although rarely) if you, say, win the lottery, get an inheritance or a massive pay rise.
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Lisa Thomas
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by Lisa Thomas » Mon Nov 05, 2018 4:51 pm
I doubt it - in a DMP you normally have to pay back the debt in full and interest can continue to accrue.

In an IVA you pay back what you can afford and at the end of the successful term any unpaid balance is written off.

Any costs come out of the creditors dividend so are approved and effectively paid, by creditors.
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