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| The independent answer to your debt problems | login join |
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stumped
| 16-05-2007 03:40 PM |
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Joined: 16 May 2007 Posts: 3 | I'm looking my options to deal with my debt. I would like more information about how things are handled within a DMP and IVA. Does anyone have any experience with respect to creditor acceptance and keeping your home within an IVA and DMP. |
| DW George | 16-05-2007 03:52 PM |
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Joined: 01 May 2007 Posts: 174 My Profile | Hi stumped Your decision about which solution you go for depends on your circumstances. I take it you have had your financial situation analysed if not you need to get it done. Creditor acceptance is required by both DMP and IVA. With a DMP any creditor can decline your proposal. However, with an IVA, if you achieve 75%value of the debt acceptance from the creditors then the rest of the creditors have to accept the proposal. Within an IVA, your equity will be looked at, normally in year 4, and the amount to be distributed to creditors will be confirmed. However, this is just a general rule, all this will be discussed at the creditors meeting. |
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stumped
| 16-05-2007 03:55 PM |
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Joined: 16 May 2007 Posts: 3 | Thanks for the George. How much of the equity will i have hand over? |
| DW George | 16-05-2007 04:05 PM |
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Joined: 01 May 2007 Posts: 174 My Profile | Typically you would be asked to release between 50 and 70% of the equity in year 4. If you have any equity in your house just now it may well be worth considering offering the equity upfront, or even offering a full and final payment. If your IP has not mentioned this ask for a full explanation of the possibilities available to you regarding your equity. Good luck |
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stumped
| 16-05-2007 04:07 PM |
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Joined: 16 May 2007 Posts: 3 | I appreciate all your input George. I'll let you know how I get on. |
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poppy
| 04-09-2007 07:22 AM |
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Joined: 04 Sep 2007 Posts: 3 | Hello everyone! I am new here. I am poppy from US. I want to clarify my doubt on debt, that is, If I use a debt consolidation program or company to lower my monthly payments does this affect my credit? Needs suggestions! Thanks in advance!! |
| DW George | 04-09-2007 10:43 AM |
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Joined: 01 May 2007 Posts: 174 My Profile | Hi Poppy Again welcome aboard. There are a lot of commonalties between debt in the US and the UK. So I hope you will be able to help out on this forum. Debt consolidation is perhaps the best way to retain a good credit score, if you are struggling with debt. Since you are not breaking any pre-existing arrangements with credit companies. But there are some caveats. Firstly you have to do your homework and calculate what your monthly payments are and what they would be. Secondly make sure that the monthly payments are lower than what you are paying. Finally, don't get into more debt. Use this opportunity to adjust your spending patterns and live within your means. DC is no use if you just keep adding to your debt problem. George |
| paladin | 04-09-2007 11:04 AM |
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Joined: 06 Jun 2007 Posts: 77 My Profile | Poppy You must also consider whether you want to consolidate your debt with an unsecured loan or a secured loan. If your credit rating/score is good then I would go for an unsecured loan. But if your credit rating is poor, you may find it difficult to get an unsecured loan at a reasonable rate and therefore you have to consider a secured loan. The obvious problem is that you are consolidating credit card debts etc into a secured loan which may result, if you don't keep up with repayments, in your house being repossessed. I am not familiar with US debt industry but if your credit score is reasonable, then do some shopping about for loan companies. Make sure you you also consider the duration of the loan. For example if you are looking at an secured loan then over a period of say 15 years then it may be worth considering adding the loan to your mortgage. You'll probably find the interest payments will be less. Another consideration of adding the debt to your mortgage is the cost of early redemption. Depending on your mortgage this may be quite considerable $3,000+ and may weigh on your DC alternatives. There are many considerations weigh up when looking at DC as a solution. The main one is to make sure that you will not add to your debt problem and spend outside your means. Balance your budget sheet. let us know if you need any more advice Paladin |
