Debt Questions

There is no such thing as a "free" IVA but the more reputable providers do not charge any upfront fees and their fees would be taken from your monthly payment IF you IVA is approved.

DMP £200 per month and £30,000 debt, 12.5 years to repay if creditorrs freeze interest and charges
IVA £200 per month and £30,000 debt, 5 years to repay - repay £12,000 (including fees) wipe off £18,0000....
Bankruptcy - deposit of £600, IPA of perhaps £100 per month for 36 months - £25,800....

No assets, nothing to lose - you can DMP as long as you like and do it yourself very successfully.
IVA is an option.
Bankruptcy if you have nothing to lose as it is the quickest and cheapest way of getting rid of debt....

The decision has to be yours.

We have enough equity in the house to clear the debts and because of that I believe they will probably force a sale;

If you have enough equity in the property to clear your debts you are solvent and therefore cannot do an IVA.

People do 100% IVAs if a creditor is pursuing them for bankruptcy and they want to avoid this and ring-fence their assets. This means paying all the debt, plus interest, plus a substantial sum to the Insolvency Practitioner for avoiding bankruptcy. It is not something you should consider with all this equity.

perhaps the way to go then is to increase the amount I pay on my DMP plan now that the income has increased;

sorry to be a pain, and thank you so much

Hopefully someone out there may be able to answer a couple of questions I have about this:-
I've not long started a DMP with payplan but recently had a redetermination order refused as judge thought creditor (Link financial, oh no!!) would apply for CO & would wait for this, also expressed surprise about length of time DMP would run for, at least 8 years without interest freeze etc. Have asked about IVA possibility, have theoretical £20k property equity against approx £60k debt.
1. Re raising equity in final year - the option seems to be continue for another year if this isn't possible, is this automatic? Can a creditor ask to force a sale instead?
2, At the moment I can work overtime & get occasional bonus. I've seen different opinions on how this is treated in IVA, usually seems to be some formula like "keep a bit & pay half the rest". Is there any guidance on this or can anyone tell me their experience?
3. Any guidance on which companies automatically decline IVAs, if any?
4 What are fees with payplan or CCCS - do you pay when IVA is agreed or up front?

Many thanks

With both any fees are taken if the IVA is approved - there are no upfront fees so there is nothing to lose by trying.

With a simple protocol IVA which is what most IVAs are today there is never any forcing of somebody to sell their house; if the IVA is approved and the debtor is unable to remortgage in the fourth year or the cost would be prohibitive then the IVA would extend for up to a year - all this would be discussed with you by either company prior to setting up an IVA.

There are lots of creditors who seem to routinely reject IVAs - whether or not this is important depends on the amount of one's debt they have. If they have 25% or over, vote and reject then there is no way the IVA would be approved.

If you are already in a DMP - and no matter how suprised the judge may have been at a DMP lasting mroe than 8 years some creditors will not vote yes unless it would take longer - then you have nothing to lose by trying if the company thinks it is worthwhile as you would just keep paying into your DMP until and if it were approved.

Thanks for reply, this is what I expected. Did anyone have any advice on the overtime / bonus issue?

Hi Nigpet,

My husband & I have an IVA and if my husband gets overtime he has to pay 50% of the amount, that is more than 10% of the salary used in the i & e., so far we haven't had to pay anything, but I expect it will happen at some piont in the 6years. We also have to pay 50% of any inheritence or any additional monies received.
Hope this helps

Thanks for info, similar to what I'd picked up elsewhere