Have I had the wrong advice with IVA

tanyamarie

I stated to struggle with bills and went to debt free direct, I had taken out a loan a few months previous and was told by DFD that I could not go into an IVA for a year. I paid a management programme for the first year and am now in my third year of an IVA. I have since been told that I could have gone straight into an IVA and that DFD were probably wanting their fees for an extra year. Who do I go to to question this??? also who regulates IVA and Debt management for me to contact.
Many Thanks

Anondebtadvisor

This does happen with some of the larger providers but lots of people take credit just prior to entering an IVA as a last ditched attempt at managing their debts.

You could have proposed the IVA and if rejected then go into the DMP and try the IVA again later. You can complain to their regulator you will find this on the bottom of any correspondance received from DFD

GD2_2

This is a practice known as flipping, and in fairness DFD don't do many DMP's so are unlikely to have done anything improper. This is an area while IP's have to be careful, if a new credit agreement has been taken recently and there is genuine reason why someone wants to enter IVA very soon afterwards, such as divorce/loss of income etc then that should be ok, but where that isn't the case they have to watch out for the more unscrupulous element of society. If the new loan/card cannot be proven to have been used in paying off other debts then most will refuse to look at IVA until a suitable number of repayments to the new agreement have been made.

IP's do not need 100% co-operation from creditors when looking at IVA's, but most work very hard in establishing relationships with the credit fraternity, and so therefore are unlikely to jeopardise them by looking at anything that may be considered "a bit fishy". Seems to me to be the likelier explanation for your situation.

Depth_Charge

GD2 wrote: »

This is a practice known as flipping, and in fairness DFD don't do many DMP's so are unlikely to have done anything improper. This is an area while IP's have to be careful, if a new credit agreement has been taken recently and there is genuine reason why someone wants to enter IVA very soon afterwards, such as divorce/loss of income etc then that should be ok, but where that isn't the case they have to watch out for the more unscrupulous element of society. If the new loan/card cannot be proven to have been used in paying off other debts then most will refuse to look at IVA until a suitable number of repayments to the new agreement have been made.

IP's do not need 100% co-operation from creditors when looking at IVA's, but most work very hard in establishing relationships with the credit fraternity, and so therefore are unlikely to jeopardise them by looking at anything that may be considered "a bit fishy". Seems to me to be the likelier explanation for your situation.

Hi GD2

Interesting reply

This practice is known as flipping you say!

Flipping? could you clarify what the term flipping actually means and who or what sort of companies engage in such practice and why?

Could flipping be classed as proper independent, impartial advice in the best interests of those in debt as set out in the OFT guidelines or is it just another term meaning a money making racket or scam maybe?

Do the debt advice charities such as CAB, CCCS & National Debtline engage in such practices?

Could make an interesting debate

Just my inquisitive take again GD2:)

Depth_Charge

Hi

Just had a google round on 'flipping' and found this on the Which site

Flipping: About eight in 10 people entering an IVA have already been through at least one other debt solution. Having already received front-loaded fees for a debt management plan, flipping a customer into an IVA could help a debt company maximise its profits.

A somewhat different take perhaps

What do you think GD2?

dojoman

Hi try posting this question on the IVA forum:) you should get more answers there:)


http://forums.moneysavingexpert.com/forumdisplay.php?f=159

debtinfo

Just guessing but I think GD2 may be getting at the point that in the IVA you have to make certain declarations that you have not recently made certain transactions that would have been offences in a bankruptcy and so if they have then the IVA should not be made, most of those offences have time limits so if an IVA cannot be made straightaway it is possible that further down the line the IVA could be made

Anondebtadvisor

I wonder if "flipping" is allowed under the new debt management protocol!!

GD2_2

No it isn't, it is a deplorable practice.

There are instances, maybe such as the one above, where a temporary DMP has to be entered into first before an IVA becomes feasible or possible. Pregnancy, redundancy/affordability issues, probation periods in employment are other examples, and there are lots more of course, why an IVA may not be immediately possible and in these circumstances DMP then IVA is a perfectly legitimate practice. Identifying a case where IVA is much more appropriate than DMP but using a DMP first anyway is bang out of order.

In answer to the question of whether the debt advice charities do it, then there seem to be a lot of threads, if you look for them, where that has happened, so I guess so. If 8 out of 10 people in IVA have been through a different solution, then given that the charities have a big % of the DMP plans in existence it is naive to suggest anything otherwise. Probably not CAB directly though, they just refer direct to commercial companies if they recommend IVA's.

Depth_Charge

Anondebtadvisor wrote: »

I wonder if "flipping" is allowed under the new debt management protocol!!

Hi

I suppose fair questions would be - why does it take a new debt management protocol to stop it? and will it actually stop it anyway, after all a protocol is nothing legally binding?

What have the fee charging bodies such as DEMSA ever really done about flipping all these years?

Depth_Charge

GD2 wrote: »

No it isn't, it is a deplorable practice.

There are instances, maybe such as the one above, where a temporary DMP has to be entered into first before an IVA becomes feasible or possible. Pregnancy, redundancy/affordability issues, probation periods in employment are other examples, and there are lots more of course, why an IVA may not be immediately possible and in these circumstances DMP then IVA is a perfectly legitimate practice. Identifying a case where IVA is much more appropriate than DMP but using a DMP first anyway is bang out of order.

In answer to the question of whether the debt advice charities do it, then there seem to be a lot of threads, if you look for them, where that has happened, so I guess so. If 8 out of 10 people in IVA have been through a different solution, then given that the charities have a big % of the DMP plans in existence it is naive to suggest anything otherwise. Probably not CAB directly though, they just refer direct to commercial companies if they recommend IVA's.

Hi

I like the answers if Im honest