Debt Management, an IVA & Freeman Jones

alan8817

My wife and I have £30,500 of debts on credit cards, a loan and overdrafts. I have spoken to an IVA company called Freeman Jones who have suggested I pursue an IVA with them, with monthly payments of £310. This is far less then my current payments of £510 per month to the companies I owe money to, and would allow us to live again without using credit cards to buy food, nappies etc, and be debt free in 5 years.

However, I decided to call the National Debt Helpline, and explained my situation. They suggested that I go on a Debt Management Plan with one of their partners, with monthly payments of £470 which would clear the debt quicker. This would leave us with very little cash, and I fear that I would turn to credit again to simply get by.

I really don't know what is the best course of action. I would like to pay £310 a month in the IVA but i'm now sceptical of Freeman Jones (has anybody had any past experience of this company?), but also concerned why the National debt helpline would suggest DMP.

Can anybody give me any help and/or advice. Many thanks.

Charco_2

Making repayments of £470 towards your debt of £30,500 in a DMP WOULD NOT CLEAR YOUR DEBT QUICKER!

Divide £30,500 by £470 and you'll find that it comes to just under 65 months... a typical IVA will last 60 months. Your IVA COULD be extended by 12 months IF you have a small amount of equity that cannot be addressed by a lump sum payment OR if you miss payments along the way!

The other thing to consider is that although on paper your DMP would require 65 monthly payments of £470, the reality is that your creditors are not all going to freeze interest and charges for the duration of those five and a half years. A DMP is an informal agreement where you will pay back every penny you owe regardless of how long it takes, your creditors can agree to freeze interest now and unfreeze it later. An IVA has the security that once you make your agreement all you have to do is stick to it.

alan8817

Thanks for your reply. It seems so confusing, and just want to make the right decision that won't come back to haunt me. I wanted the National Debt Helpline to basically say the an IVA was the correct course of action.

Can the IVA company, say in 12 months time, request that I pay a larger monthly amount even if our income has stayed the same ?

Charco_2

No.

Your payments will only ever change to reflect changes in your circumstances.

AdamMerry

I have been with freeman Jones for 4 years now, i hated them when i first started until i ran in to trouble after loosing my job and to be honest they did bend over backward to help me stay in the IVA and after 3 months i found a new job with less money and they managed to drop my payments that did seem to work to my advantage.
They are good at trying to help you out when you have a problem, i have herd of bad stories about them but they worked for me.

alan8817

AdamMerry wrote: »

I have been with freeman Jones for 4 years now, i hated them when i first started until i ran in to trouble after loosing my job and to be honest they did bend over backward to help me stay in the IVA and after 3 months i found a new job with less money and they managed to drop my payments that did seem to work to my advantage.
They are good at trying to help you out when you have a problem, i have herd of bad stories about them but they worked for me.

Thanks for your reply. What were your reasons for hating them ?

CodaQueen

I've been with Freeman Jones since 2007 and, having recently been made redundant and finding it hard to find work, I'm in the process of making a full and final settlement using my redundancy package and some help from my parents gifting me the small bit of money I needed to make a good settlement.

They have been wonderful to me the whole time I've been with them and getting an IVA gave me my life back after being left seriously in debt because of a former partner. I couldn't have asked for better people to deal with. The people there have been great and I'm seriously considering carrying on using their banking service after the IVA is gone as I have no faith in 'proper' banks anymore after the amount of debt I was allowed to get into.

Charco_2

Could you not think of something better to do with your £12.50 each month instead?

I know these things sound like a good idea but a simple bank account with no frills, no overdraft and just a debit card... perhaps a separate Credit card paid off each month and fistful of will power would surely be a better idea!?

Save yourself £150 a year!

ocelot0411

Do not enter an IVA full stop they are the worst thing you could do and avoid Freeman Jones like the plague.

adfax

ocelot0411 wrote: »

Do not enter an IVA full stop they are the worst thing you could do and avoid Freeman Jones like the plague.

I can't really comment on Freeman Jones as I have only ever had dealing with CCCSVA - who to date have been great.

However, it would seem that the above poster has had some bad experiences. An IVA certainly is not a way of walking away from your financial commitments, but for some people - myself included - they are the right thing.

The best thing to do is to speak to several of the debt charities - ie someone who will give free impartial advise - and make up your own mind. There are many options, ranging from a DMP to going bankrupt. The suitability will depend on your circumstances - what works for one won't necessarily work for someone else.

All I can say is that for me an IVA was the right choice and so far I have no reason to regret it.

Good look.

ocelot0411

adfax wrote: »

However, it would seem that the above poster has had some bad experiences. An IVA certainly is not a way of walking away from your financial commitments, but for some people - myself included - they are the right thing.

That is the understatement of the century I am afraid. Sorry my comment is criptic and not very helpful, I was in a very foul mood when I wrote it, and yes Freeman Jones were the cause of it.

Firstly, of course an IVA is right for some people, nothing is 'all bad' that would be a stupid and naive thing to say. However, please be aware that according to the association of Insolvency Practicitioners, its only right for about 1 in 20. These are not great odds.

An IVA may be the way forward if you are seriously facing bankruptcy and you have assets you want to protect, although be aware that most IVAs have an equity clause which will take some (if not all) of the equity out of your house in the fourth year. You also need to have about £3-400 per month to spare and be prepared to live in poverty for five years.

I cannot possibly give you all of the details here, nor am I qualified to do so, but what I will tell you is this, freeman jones' advisors aren't qualified either. They are sales people trying to sell you the arrangement that will make them the most money. An IVA makes them the most money which is why they ALWAYS recommended them to EVERYBODY. Do not believe them they have given me information which is simply incorrect and has had disasterous consequences.

As the above poster says, go to national debtline the consumer credit association, anyone for INDEPENDANT advice. Before you speak to anyone about this, find out who they are, what their qualifications are and what their role is. i.e. ask yourself what does this person have to gain from flogging me an IVA? If the answer is nothing then this is more likely to be impartial advice, but the bottom line is you cannot rely on anyone but yourself so do your homework as though your life depended upon it.

Finally please be aware that not only are debt advisors not qualified they are not regulated by the FSA or anyone else for that matter. Basically any man of the street can become a debt advisor with a day or so's training so do not put your faith in these people, they are out to make money.