Not sure if to go IVA route or DMP and Im torn

[ngochang]

Hi

Im 34 in £37k worth of debt to 7 credit cards and 1 loan.

Interest is being added to all debt as I am u able to transfer any of the CC to 0%.

My take home is £3k a month and outgoings look abit like this

450 rent
100 g/e
145 car
200 food
700 nursery
76 phone
47 internet
250 wife
1200 debt repayments

Wife brings in £1300 bit has her own stuff to pay and i give her the £250 to help her get by.

I can longer keep going like this, i am the maine earner and this is everything that i pay out monthly.

Now i cam go the iva route and they suggest £315 a month, same as the DMP.

Iva as we know ends in 5 years, Dmp will roughly be 8/9 years.

I've been looking at both options but the iva is scaring me a little with reading all the horror stories of them failing etc.

At least with the dmp it will be fairly more simple?

I am a complete novice to this and a little embarrest, the debt has accumualted by mutliple lay offs, unpaid sick leave and paternity leave, covid etc.

Any advice would be very grateful.

I know they will both tank my creditscore bit o dont have much of one as it is anyway at the moment.

 

[carrico]

@ngochang Talk to stepchange before you do anything else.

They're a free charity and will take you through your debts, your income and outgoings, help you work out a budget and what you can and can't afford to repay. They will then recommend the best way forward for you

 

[ngochang]

@carrico I used there online tools and it come out on top with the iva

 

[beloved_dust_heap]

@ngochang You have to go away and learn all the pros and cons of each option. It's a big decision.

https://debtcamel.co.uk/debt-options/

On the face of it, an IVA seems inappropriate for you. All of the negatives of bankruptcy, but no upside (you have no assets to protect)

8/9 years for a DMP is just too long in my opinion.

So it's IVA or bankruptcy. Was there a reason you have not considered bankruptcy? Have a read of this

https://debtcamel.co.uk/hard-choices/iva-vs-bankrutcy/

Be aware, debt management companies make money out of you for a DMP (usually ~12% from the lender, although doesn't cost you), and an IVA (usually about £3k). They won't make anything out of you with bankruptcy. Something to be mindful of.

 

[ngochang]

@beloved_dust_heap Thank you, umfortunately i can't go bankrupt in my job.

I spoke to my HR and they said an IVA or DMP is ok.

Stepchange would handle the DMP and they assured me they take no fees if they handle the DMP.

I could make the DMP possibly last 6 years.

I would rather tackle it myself but their are too many creditors to do it alone. Well i think so anyway.

 

[beloved_dust_heap]

@ngochang

I spoke to my HR and they said an IVA or DMP is ok.

Really? I'm quite surprised by that. That's an expensive obligation to your employer, I'd be looking for another job personally.

Stepchange would handle the DMP and they assured me they take no fees if they handle the DMP.

It doesn't cost you anything, they get the fees from the creditors. But it potentially affects their decision making.

 

[dtsg247hcm]

@ngochang Are your debt repayments paying off just interest or making any dent in the balance at all? How long is left on the loan? Depending on interest rates and amounts you could consider prioritising one debt over the other.

I don't really like saying it but is a second job an option?

I'm no expert on IVA's and DMP's known a couple of people with IVA's and they have said they wished they knew more walking it into so make sure you do your reading.