www.iva.co.uk

hi all

can any help we was going throught a iva but due to much overtime in our wages it was risky if we ever lost the overtime so w3 debt solutions have told us the debt management is for us we want to pay £300 pound amonth out to our creditors we have

argos 1500
hsbc 3000
hsbc 6000
yorkshire bank 5000
hsbc loan 10,000
overdraft 1400

would thisbe a good pay plan for this amount i know we will incur intrest on this but we dont want to go bankrupt and lose our house the company w3 debt will talk to the banks. what is the worse case for being on debt management we dont mind being on it for years because the company w3 debt will review our iva in 6 months has any one been on debt management along time


thanks foolish

I think worse case scenario in Debt Management is if the creditors refuse to stop adding interest and charges to your debt.
If they did, then you have to work out what your minimum payments on your cards / loans comes to each month. Of your £300 per month W3 are going to deduct a percentage for what they call a 'Management Charge'.

For arguments sake, lets say that is 20% - so for every £300 you pay to W3, your creditors only actually see £240

If the minimum monthly payments are more than £240, then unless they agree to freeze interest and charges, I don't think you will ever be debt free, or at least will be making payments for a very long time.

If the minimum payments are less than £240, then you'll chip away at the debt and will eventually become debt free as the debt goes smaller, so should the minimum payments. Again that is on the proviso that the lenders agree to freeze interest and charges period and not just for a short period of time, say 6 months.

You must keep in mind that if creditors do agree to freeze interest and charges, they are at liberty to reverse that decision at anytime as Debt Management, as far as I am aware is not legally binding on the debtor or the creditor.

There is an alternative to Debt Management. But it relies on you being confident enough to mangage your finances yourself. Approach the creditors yourself and advise them of what you want to do. If you can get agreement directly from them, then you can run the debt management scheme yourselves and that way the creditors will get £300 of the £300 per month as opposed to the £240. Worth a thought!



Tell it like it is.

Good advice there from Cybus - can you let us know how much equity there is in your property as I cannot follow why your IP has moved from recommending an IVA to a DMP. If you fail to make the payments under a DMP due to loss of overtime, you are at just as much risk of losing your property than in an IVA.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

no equity on property
we are thinking of doing pay plan hopefully this will work for us

any advice melanie

thanks foolish