Debt Management, an IVA & Freeman Jones

alan8817

Thanks to all who have replied to my post.

After speaking to the National Debt Helpline and the CCCS, they have both suggested I enter a DPM. To be honest I am petrified about it, but we simply cannot go on living on credit cards.

I am so pleased that I did not enter an IVA with Freeman Jones. The guy who I was dealing with, got quite annoyed when I told him I wasnt proceeding with the IVA, and then began to critise the CCCS and national debt helpline. Enough said!!!

I'm not looking forward to the phone calls and possible visits from creditors and collection agencies, but hopefully we have started the long road to recovery.

We have always turned to credit cards to pay for emergencies (i.e. car breakdown, home repairs, childrens clothing etc.) Now I'm on the DPM, I would like to save £20 a month in a separate bank account for instances like this. Is this allowed ? i.e. can the creditors interrogate my bank accounts ?

Charco_2

Ocelot, you say make unqualified statements and if i have time i will come back to much of what you are saying. I'm not looking for a fight just a little bit of parity.

Alan, A DMP (not a DPM) is an unregulated, informal debt solution - if you wish to save £20 a month you can of course! No-one is likely to interrogate your bank accounts, a mere glance at your wage slips is possibly all that is required as well as a list of your creditors and amounts due.

You could probably work it so that you save more in your DMP if you really felt that you need a buffer for emergencies just be aware that the less you pay in each month, the longer you will have to pay your DMP. Also, the less you are paying into your DMP the less impact you will actually be making on your debts - this is particularly worrying if interest and charges are not stopped. If you do manage to keep saving £20 a month (or more if you can) then it might be an idea to set yourself a target for what size of buffer you feel you'll require then once you've reached that target start saving lump sums to put into your DMP to really make an impact on the debts.

Good luck Alan!

Ocelot, first thing: you say an IVA is right for about 1 in 20... 20 what?
CCCS used to say they offered IVA to about 3% of their callers. This was often used a stick to beat "greedy IPs" whose percentages were suspiciously much higher! The CCCS get calls from a much wider and more varied type of debtor which for me certainly explains a lot of the difference - our company for example (I dont like to name names - all i will say is NOT Freeman Jones) probably places 13-25% of our callers into an IVA...

Your next paragraph you complain about Equity release, and £300-400 a month, and poverty.
An IVA is not a way to avoid paying your debts, it's a vehicke which allows you to pay your debts in amanner you can afford that tries to find a balance in fairness between you and your creditors. If you have a significant amount of Equity in your home or any other asset, why shouldn't you use it to pay towards your debts? As it happens, you're generally only required to release UP TO 85% of the value of your home, thus you still keep 15% of the value.
As for the payments, many IVAs are now done at £200 a month or even as low as £150... depending on what you can afford to pay.
No-one should be left in poverty for five years, you should have an Income and Expenditure drawn up which reflects your household budget... no luxuries obviously but not punitive either! The Guidelines for these expenses are handed out by our friends at the CCCS - they have not been updated for two years despite VAT increases and growth in petrol prices etc.

CodaQueen

The CCCS did NOTHING to help me when i had gotten into unmanageable debt (I was around £40,000 in debt by then but they said i wasn't in debt enough to be helped despite the fact i was getting into more debt when trying to pay one thing off with another) and so I called the national debt helpline and they put me through to Gregory Pennington (now Think Banking) who then put me through to their IVA affiliates Freeman Jones who, as I said before, have been wonderful.

It's always best to chose the kind of debt settlement scheme that is best for your circumstances and mine was an IVA. I'm sad to hear that some have had bad experiences with Freeman Jones though as my experience has been so great.

CodaQueen

Charco wrote: »

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!

I'm just far too scared of conventional banks...plus i like the way their account is set up (the 'a' and 'b' account) and the simplicity of how i can access my balance info.

but fear of banks is the big clincher

adfax

I think this thread shows that there is no such thing as a 'one size fits all' solution to debt; everyone's situation is different, and at the end of the day only an individual can decide on the best solution for them.

Some people have found an IVA has worked for them, others won't touch them. Nobody is completely right, and nobody is completely wrong.

Similarly, different people have different experiences with the multitude of companies that are out there. Whilst someone will say that company X is the best thing since sliced bread, someone else will say that the same company didn't help them whatsoever.

The 'best' advice is to take the best (free) advice that you can from several sources before making any decisions.

ocelot0411

Charco wrote: »

Ocelot, you say make unqualified statements and if i have time i will come back to much of what you are saying. I'm not looking for a fight just a little bit of parity.

Is this a typo? Not sure what you are driving at. If you mean I am not qualified to give advice, I made this quite clear didn't I?

Charco wrote: »

Ocelot, first thing: you say an IVA is right for about 1 in 20... 20 what?

Er people in debt who approach debt management companies? That's a quote from a leading IP btw not just something I picked out of the air. If you think its incorrect I suggest you take that up with Paul Brindley of Midland Business Recovery.

Charco wrote: »

Your next paragraph you complain about Equity release, and £300-400 a month, and poverty

Where is the compliant about equity release? It was a statement of fact. I have no property so no concern to me and therefore no cause for complaint either, I am simply trying to give the OP information that the DM companies don't always give you. In relation to the sums quoted, this is from the mouths of our good friends Freeman Jones, so again don't shoot the messanger. The poverty bit depends on who your IP is doesn't it? If they are reasonable with you, all good, if not a bit of disaster once your signed up isn't it as they have you over a barrel.

Charco wrote: »

An IVA is not a way to avoid paying your debts, it's a vehicke which allows you to pay your debts in a manner you can afford that tries to find a balance in fairness between you and your creditors.

I take extreme exception to this. Who said I was trying to avoid paying my debts? What part of my post would lead you to make such an incredibly rude an sweeping statement.

As stated in my previous post I am not an IFA and can only comment on my own personal experiences with one particular company. However there are generalities to all of these companies which I feel the average consumer is not made aware of, i.e. a lot of the employees are not qualified. If the DM / IVA company allows you contact with an actual IP, then great, they are of course fully licensed and you therefore have some recourse to the advice given by them. Again and I cannot reiterate this enough, you must ensure your advice is qualified and INDEPENDANT. If it is and this advice is an IVA, then best of luck to you and I hope you get a really good IP who will be helpful. Just don't underestimate how hard it is to live in an IVA with no contingency whatsoever. What do you do when your boiler goes bang and you have zero savings, zero credit, no friends or family who you would borrow from?

Also do be aware (sorry if I have said this already) that once in an IVA your name will appear on an Insolvency Register for any man and his dog to have a look at on the internet. Nice eh? Another thing they 'forget' to tell you.

To alan the OP - even the DMP are you sure you have to do this? Really sure? What about the effect on your credit file? Is there really no way you can manage this without one of these arrangements. Please think very carefully about this. If there is any way of handling this yourself you may want to rethink. Again I am not saying that all debt management plans / IVAs are bad, for some they are a life saver, but do, do, be FULLY aware of the adverse implications before you do anything. Once your credit file is ruined it will be so for six years.

ocelot0411

alan8817 wrote: »

I am so pleased that I did not enter an IVA with Freeman Jones. The guy who I was dealing with, got quite annoyed when I told him I wasnt proceeding with the IVA, and then began to critise the CCCS and national debt helpline. Enough said!!!

Fancy.........

ocelot0411

adfax wrote: »

I think this thread shows that there is no such thing as a 'one size fits all' solution to debt; everyone's situation is different, and at the end of the day only an individual can decide on the best solution for them.

Some people have found an IVA has worked for them, others won't touch them. Nobody is completely right, and nobody is completely wrong.

Similarly, different people have different experiences with the multitude of companies that are out there. Whilst someone will say that company X is the best thing since sliced bread, someone else will say that the same company didn't help them whatsoever.

The 'best' advice is to take the best (free) advice that you can from several sources before making any decisions.

Couldn't agree more.

Charco_2

Ocelot, apologies if anything i said was taken as rude or argumentative, it was not my intention. Let me clarify...

When I said you had made unqualified statements, I did not mean that you as an individual were unqualified to have an opinion. I meant that there were no parameters in your statements - they were very wide sweeping and general! This is the interent, this is a forum and you don't need a university qualification to have an opinion!

Has Paul Brindley of Midlands Business Recovery done a study of ALL Insolvency Practitioners? ALL Debt Management Companies? Has Paul decided this from his experience within his own company? Is Paul's one in twenty an accurate reflection of the market? Sounds a bit coincidental that it's "one in twenty" doesn't it? Why not 1 in 17, or one in twenty three? Do these figures not make as good a sound-bite for Paul's media statements or online adverts?

Supposing it is exactly "one in twenty"... by the way does that include people who approach ALL debt management companies or just his debt solutions company? If he's only making contact with a client one time in twenty perhaps he should change his advertising!

So supposing it is "one in twenty" exactly... does it include people who ring up wondering about benefits? People who ring up in debts of £4,500? All bankruptcies? All DMPs? (which are unregulated and possibly anaccountable!)
Where does he draw the line? Is it one in every twenty phonecalls?

"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"
My apologies here, I was not trying to put words in your mouth... I thought you were bringing this up as if to say it was unreasonable that people who have run up debts might use money that they do have (albeit in an asset) to then repay these debts! My bad if i misunderstood you! I understand now that you are merely giving out infromation that DM companies dont give you... DM companies are of course different from IP companies... One is heavily regulated the other is not - YET!

As for my comment that "an IVA is not a way to avoid paying your debts", this was not directed at YOU, it was not directed at anyone in particular actually, it was just a simple statement so i'll edit it if you like "an IVA is not a way to avoid paying debt!"

You might be right in your assertion that the frontline employees that speak to potential clients are not "qualified" however, they must have some sort of training in their area. As i said DMPs are unregulated but IVAs are heavily regulated, no IP is going to let an untrained employee make comments or offer advice that could eventually result in large fines or restirctions or blemishes on his licence to practice.

alan8817

ocelot0411 wrote: »

To alan the OP - even the DMP are you sure you have to do this? Really sure? What about the effect on your credit file? Is there really no way you can manage this without one of these arrangements. Please think very carefully about this. If there is any way of handling this yourself you may want to rethink. Again I am not saying that all debt management plans / IVAs are bad, for some they are a life saver, but do, do, be FULLY aware of the adverse implications before you do anything. Once your credit file is ruined it will be so for six years.

ocelot0411 - this paragraph has changed my life. After reading this, I realised that this is not the way to go forward and that I had 'other' options.

I cannot thank you enough.