I would pay more back than I owe

[t.h]

After long hard batttle with my finances, I have been in touch with PayPlan who have taken all my details. My debt amounts to 75000, and I after they took me through a budget which is very small they said that I could pay 800 a month in a debt management plan. I own a property worth 120000 and have a mortgage of 90000. They say if i did an IVA I would pay more back than I owe becuase of the equity realease in Y4. Is this true - would an IVA be better for me?

[pippa]

Hi t.h

Why not speak with a couple more IP's first to see what their suggestions are. I am not saying Payplan are wrong but it would not hurt to see what solutions others can give you. Why not go directly to an IP perhaps one in your area so that you can have a face to face meeting. I was very lucky that I live near my IP's office so all meetings were face to face, also later on I found out that I didnt need to go through the introductory company, I could have gone directly to the IP, and found the final proposal was different to that that was first suggested to me.

Pick up the yellow pages and give a couple of IP's a call, there is nothing to lose.

Hope it all works out for you

Regards

Pippa

[Oliver]

I think that it is definately worth not ruling out the IVA option just yet. As reccomended speak with some more IVA companies and guage their opinion on this.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[Adam Davies]

Hi
It,s impossible to say with only limited info,but a few things to consider are
1] A DMP will take close to 8 years to complete if all your interest and charges were stopped.
2]An IVA will run for five years,normally,and all interest will stop plus you will be safe from any futher ceditor action.
3]Are you sure that £800 is your disposible income ?
If in reality it is less then you will have long,long struggle in either a DMP or IVA.Make sure that this figure is correct.
4]In an IVA you can only repay a maximum of your original debt plus IP fees and statutory interst.
5]Your equity will be unaffected in a DMP,whilst in an IVA you will probably have to pay over 85% of it but this may be limited to 60% of your disposible income[your remortgage can cost you no more than 60% of your disposible income]
As others have rightly said speak to a couple more companies and see what they have to say.
regards

















Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Cybus]

I would be quite surprised if I were one of your creditors and I learned that with disposable income of £800 per month someone had recommended a debt management plan. Of that £800 per month debt management companies take a 'Management' charge usually of 15% and I believe capped at £100 per month, before paying any money to your creditors. So of the £800 per month that you paid per month, only £700 would be going to your creditors and £100 per month to the Debt Management Company (That's £1,200 per year in fees).
Most Supervisor's fees are being capped by creditors at £7,000 for a 5 year arrangement. If my maths is right ...

If you take your £75,000 debt and repay it at £700 per month, it will take just short of 9 years to repay the debt and you yourself will have effectively paid them £10,714 for the pleasure of doing so.

That is on the assumption that the creditors have agreed to freeze interest and charges, which they are NOT obliged to do in a Debt Management situation.

I would be inclined to suggest, as others before me, that you take further advice, preferably from a reputable Insolvency Practitioner.




Tell it like it is.