A busy couple of days in the stopping shopping household.
I managed to get a phone consultation with Payplan on Sunday. Spent an hour and a half talking to their rep Bill who was very thorough and seemed upfront and honest.
He doesn't think an IVA is the best option for me/us as we would be repaying more than I currently owe and Dh's disposable income is factored into the debt payment.
He suggests a DMP as the better option.

Pros
possibility of freezing interest.
Only takes my disposable income into account when working out payments.
We would be paying £100 less on debt than we are presently.
Potential to be debt free in 4 yrs 9 months

Cons
Shags up my credit rating.
Would shag up Dh's credit rating too as we are joint account holders on a v overdrawn bank account.

IVA
Pros
legally binding on both parties so creditors can't ramp up interest etc
All interest frozen.
Debt free in 5 yrs

Cons
Shags up credit rating
Shags up Dh's credit rating
My name goes on the personal Insolvency register, could have long term repercussions.
Dh's disposable income is factored into the repayment amount.
End up repaying more than I owe..by £10K!!!!!
Could be forced to refinance mortgage in yr 5 if equity has increased

Living on budget / snowballing
Pros
no effect on either credit rating.
Debt free in 7yrs approx.
Sense of personal achievement

Cons
Longest time to solution.
Hard to stick to budget.

I think we are going to do the budget thing, with a side order of increasing our borrowing with the mortgage company in order to repay the overdraft, thus clearing DH from all involvement in any future DMP shenanigans.

What do you think?

Comments

  1. Tracy10 January 2011 at 19:35

    Hmmm, tricky.

    Snowballing can be alright, but have you got the willpower to not get anymore debt and pay it off at the same amount every month?

    Personally I think a DMP is the way to go. I don't regret ours at all and it's learned me the hard way. I'm proud that I don't have to rely on credit to bail me out anymore. I'm handling my money a lot better.

    The decision is upto you though lovie.x

    ReplyDelete
  2. Miss Havisham15 January 2011 at 18:17

    Wowzer. Toughie. But am inclined to agree with "Tracy".

    You've said the budget option is tricky -
    Cons: Longest time to solution. Hard to stick to budget.

    Are you setting yourself up to fail? Might be best to bite the buller and go with the DMP.

    Best of luck with whatever your decision is tho.

    ReplyDelete

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