Minimum Affordable Payment Plan.

So many of our clients have mentioned how important their credit rating is to them, and whilst you may be thinking that you never want to incur credit again, it does unfortunately impact so many areas of our daily lives that we don't take into consideration until, of course, certain situations arise. For example, if you want to purchase a house, you'll probably require a mortgage. What do all mortgage lenders do before agreeing to lend you any sum of money?... they check your credit report! The same applies with landlords renting property, phone companies providing contracts, utility companies do the same and the list is endless.

 

A Debt Relief Order (DRO), as with an IVA, enables you to get rid of your debts by using a legally binding method, but the DRO is a one year commitment whereas the IVA is usually a minimum of five years. Both options will have the same, negative impact on your credit score.

 

Before explaining the MAPP in more detail, I strongly believe that you should know what happens to your debts when you enter an IVA. As soon as you enter into an IVA, most of your creditors will sell the debt you have with them to a 3rd  party lender for an average of 15% of its original value. The reason they do this is that they are allowed to write-off 85% of the original value as bad debt for which they receive tax relief. You now know that by this process, your creditors do not actually lose anything.