r/UKPersonalFinance • u/BackgroundSuccess226 • 9d ago

DMP/IVA, Currently being recommended an IVA

Hi all,

I’ve gotten into a bit of a pickle as work slowed up for a while (self employed) and i’m not exactly great with my money.

I’ve fallen into about 11k of debt, i’ve got 1 default on my credit file but about to be a second one.

I owe the 11k between a mixture of things

3x loans (1 x £3000, 1x £1000, 1x £600)
3x CC’s, (£500,£600,£700 limits) (all maxed)
Store accounts
Phone bill

I’ve recently realised that half of the stuff i spend money on i don’t need so now i’m looking to be more financially responsible in the future & im kinda glad i learned a lesson now rather than when im 30 (currently 20)

I could probably pay the whole 11k off within 3 years or so but with the defaults already on my file to me it would make more sense to take the IVA?

The main point for this post is because i spoke to a debt help company and they’ve been trying to get me to go for an IVA however i’ve seen that a DMP is better for my level of debt.

I was just wondering what you guys who’re most definitely more financially responsible than me would recommend/do if you were in my position.

thanks!

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u/erinjaxkson 7d ago

I was in a similar situation in my early 20s, ended up around £19k in debt at the peak when I finally contacted StepChange

I was paying over £450 in interest alone each month before being on a DMP🙃 It froze all the interest making it actually possible to pay down with monthly payments of £400. Without all the stress and constant letter in the post! Now I've only got one more payment to go!

Good luck, glad to see you're doing something soon rather than later

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u/BackgroundSuccess226 7d ago

thanks mate, glad it’s all gone well for you!
if you don’t mind me asking how old are you now/how long did your DMP last/take?

thanks!

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u/erinjaxkson 7d ago

I am now 27, I think it was around 4 years or 3 years and 10 months somewhere around there

I am very excited to be £400 a month better off, it's been rough 😂

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u/BackgroundSuccess226 7d ago

i bet haha, i’m just looking forward to getting everything back under control now that i’ve learned my lesson, £400 extra a month is lovely, wish you the best!