IVA application

[MomOfAngels]

Hi,

Just wondering if anyone had any experience with either DMP or IVA? Reason for asking is that I owe around £11k on a mixture of CC's and loans and am paying a high amount each month, so a company I contacted advised me to apply for an IVA. I started the application on a Friday and the researched over the weekend and found that the popular opinion was to contact StepChange, which I did. They suggested a DMP but both would have a huge impact on my credit file. When I spoke to the company to stop the IVA process, they were very snappy at me and made me feel so rubbish for cancelling. Is this due to them losing fees maybe?

Anyway, I've looked into my debts and I would be sent free in June 2024 (much sooner than the 5years IVA!). My question is, should I apply for a DMP to reduce my payments or just battle through as best I can and wear myself thin to prevent my credit file being affected? I am on maternity leave and will be back to work in a few months so will also have nursery to pay for. I've never defaulted or missed any payments either on my debts or bills. Any advice would be appreciated 😁

IVAs charge mega fees but are legally binding. A DMP relies on the goodwill of the companies but usually involving stepchange has some weight to it.

check you are claiming everything you are entitled to income wise. If you can afford to keep paying do so. Could your bank offer you a debt consolidation loan at all?

DO NOT TOUCH AN IVA, someone, somewhere is making money out of your misery.

A DMP is a better option.

I come from a credit management background and I have seen the havoc they wreak.

Contact citizens advice, they will go through your finances and get in touch with any companies your owe on your behalf, I was strongly advised against an IVA by them and instead have muddled through, contacting the companies myself or with the help of CA and the companies have reduced payments themselves. I've found that a lot of companies are actually quite willing to help when they can if you communicate with them. Good luck

Agree that an IVA is unlikely to be the most appropriate solution for £11k of debt. Forget how the IVA company are making you feel. You need to do what's best for you, not what makes them the most money.

Your circumstances are also important - are you single or do you have a partner? Do you own or rent your home? Would your job be threatened by a poor credit file (eg banking etc?). How you got into debt, ie due to a one off event like job loss or just crept up due to overspending?

You need independent advice and a full review of your budget. But unless you currently have a lot of unnecessary spending that can be trimmed, it's unlikely that your credit file will remain intact, but that's not necessarily a bad thing.

If you go with the DMP, you'll be out of debt in under 2 years and you'll probably learn to budget within your income and cope with ups and downs in expenditure by putting money away for annual and irregular expenses so these can be paid for without borrowing.

Have a look at the Moneysaving Expert budgeting/get out of debt section and do everything that is relevant. There's also signposting to getting independent help with your debts.