DMP's - normal length?

[rickyg33]

Can anyone advise as to the 'normal' length of time that DMP's are structured over?

Thanks

rickyg

[olympic_torch]

rickyg33
an expert will follow, but as far as mine was concerned, you have an income and expenditure as with an IVA then any "spare" is divided into your debt, giving a length of time in years, with mine i would have been 106 when i finished it.

[carlmcmullen]

I would agree with Olympic.

There is not 'normal' length as it is an informal arrangment, therefore no debt being wrote off, and there is normally a managment fee for DMP's (think the average fee is about 15% of your monthly payment) but the CCCS and CAB dont charge.

So if you owed £20,000 add on the 15% charge (£23,000) then you look at your I&E and if you could afford £200 then you begin to pay your debts until paid in full

(£23,000 / £200 = 115 months)

Of course as it is informal you can pay more each month and reduce the term, and you circumstances may change aswell so you could increase your paymnets further.

The more you can pay the quicker you will clear your debts.

But as i said it is informal so there is no gaurentee interest and charges will be frozen for the full term of the arrangement.

Carl

[rickyg33]

I'm considering setting one up with the creditors personally [no management by a third party] and have calculated roughly how much I can afford each month to repay.

It may take 144 monthly payments to clear through [maybe less if pay rises allow it] but hopefully it will clear the whole debt.

rickyg

[carlmcmullen]

Ricky,

If i remember right you have posted previously and talked about your property.

You have to be very careful as it is likely your creditors will seek to put a charging order on your property and this can not be stopped whilst in a DMP.

Carl

[rickyg33]

I looked into raising money to pay towards the debt. Trouble is, the cost of raising extra cash is high and in the long run would probably not enable me to pay off the debt.

For example, if I borrowed half the debt over 15 years it would cost as much as paying all the debt, bit by bit over 12 years [with interest frozen of course].

[carlmcmullen]

Think i saw that post Ricky - i have been following your Forums over the last week.

Is there any reason or any concerns why you do not feel an IVA is right for you?

[rickyg33]

It's rather complex........

The debt is about 90% mine and 10% my wife's.
She has the ability to clear her debt with help from her family.
We are going through a terrible time at the moment - talk of separating and everything......it's very difficult.

We've been advised that IVA would drag us both in, even though she can clear her debt [a single credit card], and she's not best pleased. Going through an IVA would potentially mean raising joint debt through equity [shared mortgage] even though the debt would be down in my name.

Just looking through various scenarios.

[carlmcmullen]

Well you could have an IVA without involving your wife, however i would not really recommend it if your future is uncertain.

Maybe a DMP would be a temporary fix until things settle down, like i said there is always a problem with charging orders and further interest so i perhaps would not sugest a DMP would be a long term plan given your debt level, but would certainley buy you some time until you can sort out the way forward.

[J-DOUBLEYA]

Charging Orders are getting much more common place these days but if the cahrge is created through CCJ then the debt should be interest free at that point. If you have a 20K debt which is charged to the property it is interest free and being repaid at a rate that you can afford. The chances of a court granting an order for sale is very low (in the county court). If you have equity in a property and borrow that same 20k out up to 85% for the purposes of an IVA, you may end up writing off a chunk of the debt but, how much are you repaying over the term of the mortgage ? IVA's and DMP's each have their place, just make sure that whatever you decide, the repayment is affordable and you understand the consequences of any action you take.

[MelanieGiles]

Industry statistics confirm that most DMP's fail before the end of the first two years. This does not mean that most DMPs are incorrectly proposed, but that they are proposed for inappropriate reasons.