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By Popper
I have been in a debt management plan for a couple of years. However it is now likely that a new creditor (who's debt was not proved at the time I started the DMP) is now going to successfully get a CCJ against me at the court. What can I do about this debt? Can I include it in my DMP? I have also been told that it might be better for me to start an IVA? Is this right?
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By Hayden
Hello Popper. Welcome to the forum.

There is nothing to stop you adding his new county court judgement debt into your debt management plan. Are you using a debt management company to help you or are you managing the DMP yourself? If you are using a company then you should speak to then as soon as the CCJ is issued and ask them to include the debt.

In terms of whether an IVA is a better solution for you, this would depend on a number of things. How much debt do you have in total, what can you afford to pay each month and whether you are a homeowner. If you can give us more information about these areas we can then give you more advice.
By Popper
Thanks for replying so quickly Hayden

Overall my debts are about £50k but with this new debt the balance will increase to around £56k. I am a home owner but only have about £30k of equity which I cannot get my hands on so this is not really very helpful. I am paying c£300 each month into my DMP . What do you think I should do? Add the CCJ debt to my DMP when it happens or change to an IVA? What happens to my house if I do that?
Hi there Popper

I think you have a number of things to consider. Haden is right, in theory you can add this CCJ to your DMP. However if the creditor is hostile then they may reject the offer of monthly payment. They could then go back to court to get an attachment of earnings or even try to secure their debt against your house with a charging order. In addition, if you end up owing £56k, then at £300 a month it is going to take you 15 years minimum to repay your debt using a DMP. As such I think it is well worth considering an IVA.

An IVA would overturn the CCJ and protect you from further actions that this creditor might take so in fact your house would be better protected. You would have to commit to releasing home equity if possible. However this may not be possible in which case your IVA would simply be extended for a year (to 6 years). Utlimately you would almost certianly pay less and be debt free faster using an IVA.

For more information about this solution have a look at the following information: https://www.beatmydebt.com/iva/index.htm
Hi Popper.

Stepping aside from the issue of whether a debt management plan remains the right solution for you, please make sure you take the opportunity to fully inform the Court about your circumstances and other debts.

Failing to do so could leave you being asked to pay an unrealistic amount each month with consequences for your debt management plan and other creditors.
Hi Popper

I agree with Steve, given the level of debt that you have and your other circumstances the IVA does seem like an ideal solution for you. Have a look at the link that Steve posted which will give you lots of great information about the IVA solution. I also suggest that you speak to a debt expert about the IVA option and chat through exactly how it might affect you.

Phil also makes a good point about your potential CCJ. You must make sure that you complete the documentation that you receive from the court so that they can make the right judgement about your ability to make sensible monthly payments. Have a look at the Beat My Debt guide to dealing with county court judgements which explains exactly how to complete these forms correctly: https://www.beatmydebt.com/panic-room/c ... claims.htm
Popper, which ever decision about how to deal with your debts you mkae, as has been said already it is very important that you complete the documentation you receive regarding the CCJ and your ability to pay correctly. This way if you do decide to stick with your DMP, the required CCJ payment will hopefully fit neatly into this. If not you will have to apply to get the judgement changed which is posible but better to be avoided if you can.
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By Hayden
Hi Popper

Form what you have said about your situation I think the IVA is an ideal solution for you. If you stick with your DMP, it is going to take you a crazy length of time to pay your debts and even then this new creditor could still attack your house with a charging order and ultimately an order of sale (although this would be rare). The IVA will protect your from this.

As Steve has said, if you start an IVA you have to agree to release equity from your property to repay some debt if you can. However even if this is possible you will clearly not be able to release 100% of the equity. As such you will almost certainly end up repaying less than you owe and getting out of debt far far faster than if you stick with the DMP.
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By Geraldine
Hi Popper

Given that you have your house that you need to protect, bankruptcy would certainly not be a sensible solution for you. From what has been said already, continuing down the DMP route means the time it will take for you to become debt free is uncertain. In addition your house may still be at risk from this creditor who is currently taking legal action and could well take more. As such it looks to me as though an IVA is an ideal way forward. I would chat it through with one of the experts at Beat My Debt. They will be able to explain the advantages / disadvantages to you.