DMP, Bankruptcy, IVA?

[fresh-start]

Please could someone advise me about my issues. I've already spoken to CCCS and was told that my options were either bankruptcy or token payments.

 

Background:

Currently working part time and earning just enough to cover a "low" budget according to CCCS's standards. Had health problems, including hospitalised. Now I need to get into a career which will allow me to work for the next few decades.

 

Debt:

Approx £28K over 6 credit cards (highest is £6k, lowest is £2.5K) and 1 overdraft.

 

I was advised that I need to be in a position to pay the debt off in under 10 years so CCCS won't sort out a DMP for me.In my case, what I really need to do it pay reduced for around 4.5years. Then I'll be in a position to be making larger payments. In 6 years I need to co-sign for a re-mortgage of the family house. Currently NOT in my name in anyway.

 

All debts are on my file with Equifax and most likely enforceable.

 

Question:

At the moment the only attraction for token/DMP is that I can keep two credit-rebuilder cards to boost my credit over the next 6 years. However if I risk getting some random default say 3 years from now if the bank sees my CR file and doesn't like me using it, then my record is tarnished for 9 years, not 6! I also wanted the option of using the credit card due to the inherent protection against fraud, purchases over £100 etc.

 

Eventually I was planning on CCA and SAR'ing all of them as I set aside money each month for postal orders.

 

I should have made a thread on here earlier and forgone the waiting time for CCCS appt. On the plus side, I now now for certain that I'm not eligible for any benefits or support from the State.

 

Questions below and in earlier paragraph with “question” in bold.

 

Do you think the creditors will accept token payments until July 2017, higher reasonable payments thereafter and consider that a DMP and not default me? CCCS said that they aren't able to negotiate that kind of variable DMP at the moment. I'd of course be frank about my health issues, how I'm studying pt time then fulltime, difficulty finding more work at present etc. However CCCS said that the banks probably won't care about my personal circumstances nor accept a DMP on such a low level of repayment (without defaults on my record and/or passing it onto an agency. Agency might accept it though...).

 

 

so...DMP, bankruptcy, IVA, token payments or what? Thanks

Edited December 1, 2012 by fresh-start

[Bandit127]

You could start a self managed debt management plan and see how it goes. Keep the money to go bankrupt under the mattress as a backstop. You can take that option at any time.

 

However, I suspect you will have a hard time. The 2 credit cards really make no sense at all. Either from a personal viewpoint or a debt management one. I suspect all of your creditors will consult your credit files - and the DCAs that they will pass these debts on to certainly will. And these 2 accounts being serviced while you ask others to go without will be - errm - objectionable.

 

If you did go bankrupt, the official receiver may well decide that your conduct represents unfair treatment of your creditors and ask you to accept restrictions as a result. (BRU/BRO).

[fresh-start]

Thanks.

 

Re: the 2 credit rebuilders:

 

 

• As I said, it's just a proactive means of recouping some credit rating over the next 6 years, hence the personal interest, as well as the protection again fraud and for any purchases >£100.
  
• I guess it's just a sign of how the creditors won't be reasonable if they find it objectionable. I would ONLY be using them for items on my I&E form which has already been deemed more frugal than average according to CCCS. I can even give receipts to the creditors to prove this. Although I guess that they won't be reasonable enough to consider the logic behind it.
  

 

 

RE: DCAs

You're saying that my liabilities will all be passed onto DCAs even with token payments and/or an agreed upon DMP? Like I said, I think I might have £150-200 for a DMP plan, although it's

 

Thanks for replying, I didn't know really know properly about BRUs/BROs until your post prompted me to look into them.

[Bandit127]

You call them credit rebuilders. Yet your credit rating has not yet become demolished. (And it will be).

 

The logic of this escapes me. You are about to have (probably) all your accounts go in to default - or worse enter bankruptcy. You seem to have no choice on this - paying 25% on a debt is not going to stop defaults and DCAs.

 

These 2 cards are going to make exactly zero difference to your credit rating in a few months time. And may well prejudice progress on a debt management plan and very likely give you a problem if you go bankrupt. It makes no sense.

 

Personally, I would loose them ASAP and concentrate on keeping your rent/mortgage and utility bills up to date. That will count for you and also keep your priority debts in good shape to boot.

[fresh-start]

Thanks for your continued advice.

Edited December 1, 2012 by fresh-start

[fresh-start]

Deprecated post

Edited December 1, 2012 by fresh-start

[fresh-start]

I think I'll try the usual path (in my ideal order):

 

 

• Self negotiated DMP, 1st with token payments whilst waiting for them to agree to an informally/formally agreed XY-year repayment plan.
  
• Cut off extra card in shared credit card a/cs so I no longer need to worry about what other card holders are doing in my name.
  
• CCA and SAR when I can afford postal orders, maybe 1-2 each month. Budget those in too!
  
• Stick to a realistic DMP, even if it's 50 years repayment!
  
• Never use credit again until I need to for something like keeping a roof over out heads. The pre-paid credit card option looks viable without the issue of interest etc.
  
• As Bandit said, paying utilities, mortgage etc is more important. I'll factor in realistic projected values for my I&E sheet and go from there. Those are definitely a priority for both myself and my family vs credit card debt/OD/
  

 

I'm so glad that I'm finally getting to grips with this and will no longer need to rely on credit for something as meagre as buying a loaf of bread at tescos!

[westfield]

Hi

If i have read this correctly you have not yet defaulted on your debts or at least not defaulted on your two cards.

They are all taken out in the last 6 years.

If you go BR now it will cost you just over 700 and in all likelihood you will be discharged in a year and in 6 you will have a clean credit file. If you opt for a dmp you could be paying these debts off forever. Of course 6 years after the default that will come off your credit file BUT a dmp is not legally binding and someone could apply for a ccj or issue a SD at any time. Just my view,tell me if i have the facts wrong.