Interesting article on IVAs

rog2

Charco wrote: »

My bad, i assumed he'd post IVA stats over on the IVA board, where he took great care to highlight their impending arrrival!

These 'statistics' have a wider implication than just the 'IVA board'. Since bankruptcy is an almost inevitable consequence of a failed IVA and many of the posters on the main 'Bankruptcy and Living With It' board are there as a result of failed IVAs, I can only assume that fermi felt that they would reach a wider, possibly less hostile, audience on the main board.

However, I do see some relevance in your question and am more than happy to post a link to that thread. Equally, anyone who is in, or contemplating, an IVA, or, as in your case, feels strongly about these 'statistics' is more than welcome to contribute to the discussion:

http://forums.moneysavingexpert.com/showthread.html?t=2125857

It does tend to get a bit 'quiet' on a Friday afternoon - but not, usually, for long.

Charco_2

These 'statistics' have a wider implication than just the 'IVA board'. Since bankruptcy is an almost inevitable consequence of a failed IVA ***Then surely by posting over there its too late! Post here and warn everyone!***

It does tend to get a bit 'quiet' on a Friday afternoon - but not, usually, for long. Still a deafening silence on both boards!

coolcait

Having looked at the article in the orginal post, I wonder if the opening sentence about "As many as one in five debt repayment plans are falling by the wayside, leaving thousands of Britons in danger of going bankrupt" is in fact meant to refer to IVAs (but the journalist got the terminology wrong)?

The rest of the article makes no mention of 'debt repayment plans' (although the word 'repayment' is used a couple of times to refer to payments made into an IVA). Looking at the article as a whole, it is very much about IVAs. And only IVAs

Which brings us back to the possiblity that the journalist had a moment of confusion on the termninology when she wrote the first sentence.

Given that she also wrote this:

"In Scotland and Northern Ireland, the number of comparable "Lila" plans ("low income, low assets") rose by 40%", I'm inclined to think that we're seeing a journalist (or editor) who is suffering from some confusion.

I don't know if Northern Ireland has a LILA system - a quick google isn't throwing up anything other than sites/articles which talk about NI and Scotland. The half dozen or so I've looked at all refer to LILA in a purely Scottish context.

In Scotland, LILA is not comparable to an IVA. The closest equivalent is a Trust Deed. LILA is one set of criteria used to assess whether someone can make themselves bankrupt or not

In fact, it is highly unlikely that anyone who met the LILA criteria for bankruptcy would be accepted onto a Trust Deed.

Part of the reasoning behind the introduction of the LILA approach was that the money advice sector had identified a group of people who, because of their low income and low asset status, were excluded from the traditional forms of debt relief, such as Trust Deeds and bankruptcy (because of the evidence you had to present to court if you wanted to make yourself bankrupt).

So, on balance, given that huge and glaring error of terminology, I find myself unconvinced that the reference to 'debt management plans', in an article which is entirely about IVAs, is anything other than a further (misnamed) reference to IVAs.

coolcait

Charco wrote: »

These 'statistics' have a wider implication than just the 'IVA board'. Since bankruptcy is an almost inevitable consequence of a failed IVA ***Then surely by posting over there its too late! Post here and warn everyone!***

It does tend to get a bit 'quiet' on a Friday afternoon - but not, usually, for long. Still a deafening silence on both boards!

Fridays - even weekends - do tend to be quieter across the boards (literally speaking).

There's also the fact that people may not have read the threads for a variety of reasons. Some people don't like clicking on links; some don't like stats; some don't think that IVAs have any relevance to them (for example, those of us who are Scots - I only read this thread because it was 'live' at a time when I was having an insomnia moment!).

Charco_2

Quieter or not, those people who were eagerly awaiting the released stats have all been on the boards and posting but have been noted for their absence on this particular topic!

rog2

Charco wrote: »

These 'statistics' have a wider implication than just the 'IVA board'. Since bankruptcy is an almost inevitable consequence of a failed IVA ***Then surely by posting over there its too late! Post here and warn everyone!*** [/COLOR]

In all fairness, Charco - THIS thread was posted as a 'warning' that 'Insolvency is the price of falling behind with IVA payments'.
It was posted by a representative of one of those charities that, all too often, has to deal with the aftermath of an IVA 'failure'.
As such the thread was indeed posted on the correct board and should be seen for what it was - a warning to those in, or contemplating, an IVA, of what could happen if they do not keep up with their payments.
The link to the actual statistics was introduced to 'back up' the original post - pure and simple.
It is a shame that many of those who post, on whichever forum, of their IVA failures, state that they were never - verbally at least - fully advised of the consequences of a failed IVA by the IVA company that sold them 'the solution to their debts'.
On the other hand, it is good that independent charities, such as CAB and, although you may disagree on their level of independence, CCCS are, in fact, around to give such warnings.

Charco_2

Here it is, the consequences of failing your IVA: You wont be out of debt!

I dont see what the big surprise is!

It's the same consequence as not completing your DMP, in fact, it's the same consequence as not paying your debts!

'Insolvency is the price of falling behind with IVA payments'.
No, it's not, you must already BE insolvent to enter into an IVA.

rog2

Charco wrote: »

Here it is, the consequences of failing your IVA: You wont be out of debt!

I dont see what the big surprise is!

It's the same consequence as not completing your DMP, in fact, it's the same consequence as not paying your debts!

'Insolvency is the price of falling behind with IVA payments'.
No, it's not, you must already BE insolvent to enter into an IVA.

And why charco, if what you say is true, do you feel the need to resort to the lowest form of wit to justify your stance?
Are your views so inflexible that you can not enter into a meaningful debate on what are, after all, published and verifiable figures which, to most people, show that there must be flaws in a system which has such a high 'failure rate'.
I am sure that your experience would be put to much better use by looking, and acting upon, at areas within the IVA process which could be improved, such as the 'selling process'.

Charco_2

rog2 wrote: »

And why charco, if what you say is true, do you feel the need to resort to the lowest form of wit to justify your stance?
Are your views so inflexible that you can not enter into a meaningful debate on what are, after all, published and verifiable figures which, to most people, show that there must be flaws in a system which has such a high 'failure rate'.
I am sure that your experience would be put to much better use by looking, and acting upon, at areas within the IVA process which could be improved, such as the 'selling process'.

ROG, my views on this are not inflexible. If you read the other thread you'll note that I do comment on the large amounts of failures and try to discuss what might the failings of the system be. (You might also note that i seemed to be the only person willing to discuss the facts, figures and stats rather than simply mud-sling!)

A brief summary of what i've been saying on the other thread brings to light two points of interest - although i can see a few others from the limited information that i am yet to touch on.

The first point is that (although we cant break it down for every year) we can see that from 2008's figures that 10% of the agreed IVAs failed within the first year. For me this is an indication that the proposals were unaffordable from the offset - this could be for one of two main reasons (but there are other factors too):
1. The IVA was mis-sold or unrealistic from the offset OR
2. At the creditors meeting the creditors proposed an uplift in the contributions that was unsustainable - this is different from the IP proposing a IVA destined to fail.

I would assume most first year failures would fall into one of these two categories.

This leaves 20% of ALL IVAs open to faliure. If the IVA has lasted longer than the first year, for the most part it's safe to assume that the IVA was an affordable debt solution so 2/3 of the failed IVAs, failed because of something that happened AFTER the IVA was proposed - that "change in circumstances" that i have been talking about recently!

Can you really haul an IP over the coals because someone lost their job two years after the IVA started? Or because their wife fell pregnant with triplets?

This leads on to something else I said over on the Bankruptcy thread which is that the numbers of failures ARE ridiculously high and so more effort should be put into finding the root causes and it is the responsibility of the IPs, the CREDITORS and our very own LAW-MAKERS to bring about very real change in the way people are treated in debt.

The Stats DO NOT provide conclusive evidence (or any evidence) that IPs are money hungry crooks flitting from victim to victim. And the fact that the stats failed to be the Silver Bullet many people were looking for to slay the blood-thirtsy vampires seems to have left a feeling of anger and disappointment on these boards!