IVA support and discussion thread
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I know it has come up in discussion before but I am surprised that with IVA's being such a long term commitment, how easy it seems to be able to enter into one with such a low monthly payment or income. I fully appreciate that circumstances can change over the long 5 year period, but it really concerns me when you read that IVA's have been taken out by people on benefits.
As most of us know, creditors have no scruples about agreeing most forms of debt as long as they are getting paid something but surely this is an area that needs far more regulation where IVA companies are concerned. There was a time when there were boundaries when entering into an IVA such as minimum amount of debt and disposable income, but is seems that some firms are increasingly pushing them which in return means people in debt are not being given good or impartial debt advice which is essential.
Should there be a shake up of the whole debt segment especially IVA's? With an increasing amount of people seeking debt options, it is clear from many of the questions on forums such as this that IVA advice is not consistent or in some cases some could say bordering on negligent. Or should people thinking about entering into a formal debt option be made more aware of other options. I know my IVA company sent details of debt options and went through all of them with me (but as we know I am with one of the best) so is it a case of people not really looking at other options before agreeing, or are some IVA companies taking advantage of this lack of knowledge, meaning in quite a lot of IVA cases it is doomed to fail, leaving the person in debt facing bankruptcy, something which probably should have been an option from the beginning.
Throwing it open for discussion as always!
Wisdom comes from experience. Experience is often a result of lack of wisdom.0 -
Hi FTR,
Good points: We have seen several accounts on this forum alone of people on state benfits struggling with their IVA.
I suppose the natural assumption (and indeed one that proves to be the case very often), is that people in that situation often have little in the way of assets to protect, and you wonder why they did not go BR, or even qualify for a DRO.
however, it is not unheard of to find someone on state benefits living in their own home, so I suppose if you have a house to protect, then you may not want to risk BR etc.
Saying that, the huge failure rates of IVA's suggest that, whilst they are a great solution for some, they are clearly being mis-sold to people where this is not the case. You talk about creditors having 'no scruples' - fair point. Additionally, as termination rates suggest, I would speculate that most IVA firms have very few scruples, in mis selling the product to the 'wrong' customer, often preying on the fact that, by the time a customer has approached them, they are in a state of panic.
A case in point that interested me, was when I came across the following account of a customer (not sure if she was a benefit claimant or not, but they clearly had a v.low D/I), who has clearly approached an upfront fee-charger. After seeing other members of this particular forum saying 'speak to another company etc...', I thought I would add a little balance by pointing the OP in the direction of CAB, the debt charities, 'Debt Camel' etc... and was somewhat surprised by the response from a couple of well-known and reputeable IP's.
http://www.iva.co.uk/forum/topic.asp?TOPIC_ID=56922&whichpage=1
Clearly, even those considered by many, to be amongst the top of their game in the private sector, did not seem to appreciate my attepts to advise the OP. (I accept however, that the 'Debt Camel' site does bang on about IVA firms fees etc, and has an overall anti-IVA bias, whilst claiming to be 'impartial' - familar story).
Anyway, what do you think?0 -
I think UTMNII that the debate on our other hangout does prove the point that at the end of the day quite a lot of the debt advice is based on opinion, from where you get the information from and I wholly agree with the unbiased opinion quote.
However it is probably going to be very much challenged depending on which site you are using which is where so much of the problem lies. The other site is very good for getting an idea of life in an IVA and who to maybe look at but I really do feel that despite it being a stressful time and panic about debt is normal, is to research options carefully.
I can see both sides of the argument as yes some advice out there is shockingly poor but I also think that the bad advice is highlighted more than the good advice and can give a skewed perspective on the IVA industry as a whole, and I can understand that a few firms who really are trying to do their best for their clients are probably no doubt frustrated by how the industry is being 'tarnished' by less reputable firms.
I'm not sure it wasn't appreciated but I think you have to think in terms of where you posted the information. I am not saying it is right but there does seem to be two different attitudes between here and the other site which is going to happen, especially when one is more concerned with the IVA aspect, which is probably one of the reasons I don't post on there much as I can be a bit too controversial for such a forum. It's a great site for IVA's but you have to take it in the context that it is really about IVA's and not really giving advice about other debt options. Personally I like the Debt Camel website as it does give you the options in a clear format listing both the pro's and con's but I am guessing it is not going to be popular for IP's as it does not picture IVA's in a very good light. Admittedly a lot has changed rapidly over the last couple of years with PPI and equity release so there may be an improvement in the failure rates from where the IVA protocol came in but it is disheartening to see some firms are clearly not giving good advice on IVA's that are being set up now.
The problem is statistically there is very little information from the DMP sector to compare the failure rates of an IVA with a DMP, it would be brilliant if there were some stats to show how many had entered into a DMP and subsequently had to look at more formal debt options but we both know that is not going to happen.
I shall get off my soapbox for a bit to allow some other opinions now.
Wisdom comes from experience. Experience is often a result of lack of wisdom.0 -
UpToMyNeckInIt wrote: »Hi FTR,
Good points: We have seen several accounts on this forum alone of people on state benfits struggling with their IVA.
I suppose the natural assumption (and indeed one that proves to be the case very often), is that people in that situation often have little in the way of assets to protect, and you wonder why they did not go BR, or even qualify for a DRO.
however, it is not unheard of to find someone on state benefits living in their own home, so I suppose if you have a house to protect, then you may not want to risk BR etc.
Saying that, the huge failure rates of IVA's suggest that, whilst they are a great solution for some, they are clearly being mis-sold to people where this is not the case. You talk about creditors having 'no scruples' - fair point. Additionally, as termination rates suggest, I would speculate that most IVA firms have very few scruples, in mis selling the product to the 'wrong' customer, often preying on the fact that, by the time a customer has approached them, they are in a state of panic.
A case in point that interested me, was when I came across the following account of a customer (not sure if she was a benefit claimant or not, but they clearly had a v.low D/I), who has clearly approached an upfront fee-charger. After seeing other members of this particular forum saying 'speak to another company etc...', I thought I would add a little balance by pointing the OP in the direction of CAB, the debt charities, 'Debt Camel' etc... and was somewhat surprised by the response from a couple of well-known and reputeable IP's.
http://www.iva.co.uk/forum/topic.asp?TOPIC_ID=56922&whichpage=1
Clearly, even those considered by many, to be amongst the top of their game in the private sector, did not seem to appreciate my attepts to advise the OP. (I accept however, that the 'Debt Camel' site does bang on about IVA firms fees etc, and has an overall anti-IVA bias, whilst claiming to be 'impartial' - familar story).
Anyway, what do you think?
Hi
Very interesting as always
Just read this and the thread on the other site.
You certainly...lets say 'enhanced the debate over there' is my take
IVAs for people solely in receipt of benefit income has at times been the subject of heated debate for years and still is on occasions with DLA a hot potato so to speak
I could write a book to be honest, maybe I will some day, it would probably be a little different from another IVA book that has been around a while now, forgot the authors name, mmm maybe it will come back to me!
In the meantime UTMNII maybe have a read through the link below from somewhere back in time in an age where a number of forum IVA debates were definitely not for the faint hearted - it is a report that I was involved in back then and covers cases still fresh in my memory despite the passage of time. Lydia delivered a brilliant & witty speech on the report at the proceeding Derbyshire Debt Crunch Conference (I think it was called)
http://mymoney.nedcab.org.uk/moneyadvice/documents/iva/IVA%20Report.pdf
See it is an old, old story that arguably has not changed that much, again despite the passage of time:)
No offence meant to my many respected friends over there on the other forum.
Wry smile time again guys, that's all:)
Just my take
DC0 -
Thanks for the input FTR & DC.
Go to agree about the 2 quite different attitudes that apply to this and the other forum respectively (hence why I regularly peruse both, and form my own opinion).
DC: That report (I'm guessing from c2008/2009?), made interesting reading. I agree that much of what the author was concerned about is still present today - particularly regarding mis-leading claims, and selling the product to people for whom it is not the best solution.
Oh yes, and the use of DLA 'income' by some IVA firms in general income/affordability calculations - utterly disgraceful, and something which I recall from a recent forum post, may still be an issue.
However, paras. 40 & 110, imply that IVA homeowners WILL HAVE to remortgage/equity release 100% equity or sell the house!!! Not the case now, but was it really as harsh as I have read it, back then? (I am aware that pre-2010 protocols had much harsher equity release terms, so perhaps this was the case the time - certainly not a prospect for the faint hearted as you say).
A clear equity release of up to 85% and subject to affordability criteria is enshrined in modern IVA's - certainly would not have signed up to the pre-protocol version!
Interesting as well that the ASA did not pursue the complaints about claims of up to '75% debt being written off'; and 'set you debt free in 60 Months' (paras. 100-101). Is this because this is true in many cases? (Clearly not in all cases admittedly, obviously).
Other areas of the report, such as the fees involved, clearly are not quite so much of an issue today (£3-5K fees seem the norm nowadays) £10K back then? - pure extortion!!!
Seems to me that the competition from the debt charities may have gone some way to drive fees down and remove misleading advertising (a good thing), and I only hope that the CAB, the charities, the OFT, ASA and the private sector, continue to work to improve things further.
As I said on the other forum: Clearly a lot more work needs to be done to reduce the 35ish% of IVA terminations.0 -
A very interesting report DC which highlights that some of the problems still persist. It has also shown that there have been improvements in the process with the 2010 protocols although I feel perhaps there is some backwards movement with the secured loan and PPI issues.
Due to the campaigning by CAB and other bodies I think there has been improvements made since the report was written but I still don't think it helps that there is one group that oversees IP. It was interesting to read about the Debt Resolution Forum and how the IPA was trying to establish some common standards but from researching into that it seems not a lot of progress has been made with that and it was voluntary anyway not really helping to deal with those rogue firms that are probably contributing to the statistics of failed IVA's by giving poor advice.
As we know many of these bodies such as the ASA very rarely implement the actions that they could take in ensuring misleading advertising does not happen, but how rarely do we see more of a slap of the hand approach to these companies rather than penalising companies through fines.
Wisdom comes from experience. Experience is often a result of lack of wisdom.0 -
I spoke to stepchange IVA team today and they ASSURED me that they would not ask anyone in an IVA to take out a secured loan in order to release equity in their house.
They said this would make absolutly no sense what so ever as it would just put people into debt that had entered into an IVA to get out of debt.
He told me that what I had read must have been inaccurate information.
I believed him.
I have tonight however found out that it may actually be true. Read that the main change to the 2014 IVA protocol has actually included this thing about secured loans.
Can anyone please tell me what is true and what isnt before I sign up for something I may regret?0 -
scared-sick wrote: »I spoke to stepchange IVA team today and they ASSURED me that they would not ask anyone in an IVA to take out a secured loan in order to release equity in their house.
They said this would make absolutly no sense what so ever as it would just put people into debt that had entered into an IVA to get out of debt.
He told me that what I had read must have been inaccurate information.
I believed him.
I have tonight however found out that it may actually be true. Read that the main change to the 2014 IVA protocol has actually included this thing about secured loans.
Can anyone please tell me what is true and what isnt before I sign up for something I may regret?
Hi
Very interesting
It would not be sensible and dangerous to advise you to sign up to anything or not without knowing your full circumstances.
Have you been advised on all options and if so do you fully understand them?
Below is the link to the 2014 IVA protocol (read section 9.1 down especially para 9.2 and maybe ask the Stepchange chap to clarify the position)
http://www.insolvencydirect.bis.gov.uk/insolvencyprofessionandlegislation/policychange/foum2007/plenarymeeting.htm
Have Stepchange drafted any IVA proposals and if so have you read them carefully especially any clause relating to equity release?
Big decisions that could affect you for a long time
Make sure you fully understand all your options before signing anything
Let us know how you go on if possible
Take care and best wishes
DC0 -
Find_The_Real wrote: »A very interesting report DC which highlights that some of the problems still persist. It has also shown that there have been improvements in the process with the 2010 protocols although I feel perhaps there is some backwards movement with the secured loan and PPI issues.
Due to the campaigning by CAB and other bodies I think there has been improvements made since the report was written but I still don't think it helps that there is one group that oversees IP. It was interesting to read about the Debt Resolution Forum and how the IPA was trying to establish some common standards but from researching into that it seems not a lot of progress has been made with that and it was voluntary anyway not really helping to deal with those rogue firms that are probably contributing to the statistics of failed IVA's by giving poor advice.
As we know many of these bodies such as the ASA very rarely implement the actions that they could take in ensuring misleading advertising does not happen, but how rarely do we see more of a slap of the hand approach to these companies rather than penalising companies through fines.
Hi
It is a long time since I have properly read through the report.
I had a look through some old papers today and found an original copy of the report and draft notes that were used in its compilation (if that's the right word:)
It is fascinating to look back and compare developments as they are now.
Some interesting passages especially on the DRF and the now defunct but definitely controversial outfit called the IVA Council that arguably led the way in the field of so called IVA to bankruptcy assist outfits.
I think you make a good analysis on the report and the state of affairs today.
One thing I can tell you is that if you think there are heated debates on IVAs today it does not compare with the sometimes no holds barred stuff back then, there was no love lost you can trust me on that one ( as those on the other forum that were around then will almost certainly confirm:)
My take as always
DC0 -
Depth_Charge wrote: »Hi
Very interesting
It would not be sensible and dangerous to advise you to sign up to anything or not without knowing your full circumstances.
Have you been advised on all options and if so do you fully understand them?
Below is the link to the 2014 IVA protocol (read section 9.1 down especially para 9.2 and maybe ask the Stepchange chap to clarify the position)
http://www.insolvencydirect.bis.gov.uk/insolvencyprofessionandlegislation/policychange/foum2007/plenarymeeting.htm
Have Stepchange drafted any IVA proposals and if so have you read them carefully especially any clause relating to equity release?
Big decisions that could affect you for a long time
Make sure you fully understand all your options before signing anything
Let us know how you go on if possible
Take care and best wishes
DC
I have not signed up to anything yet.
I am in the early stages of looking into going from a dmp onto an iva.
Stepchange rang me back and booked an appointment to speak to an IVA person in depth on Thursday.
In the meantime I have been looking into information regarding IVA's and came accross this secured loans clause.
now I take it this is quite new for this year but you would think the IVA people would know about it!!
Could it possibly be that they do know about it but just dont do it as part of their IVA's as it is wrong???
Anyway, I actually rang them back today to cancel my appointment as I had changed my mind and was just going to stick to the dmp.
Person asked me why so I told him I was worried about losing my house, did not see the point in going into an IVA oly to be forced to get a loan at the end of it as that defeated the object in my opinion. Then there was the third reason of I thought they were procedded by Grant Thornton who after again doing some reasearch into, wouldnt touch them with a barge pole.
The third point again concered me as he also assured me they are not processed by grant thornton unless i was self employed. Again i am not entirely sure this is accurate information.
Are these IVA things supposed to be clear and transparent or are they full of 'small print' which you need a degree to understand??0
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