What Happens if an IVA Firm Goes Bust?

UpToMyNeckInIt

I am prompted to ask this question after hearing on BBC Breakfast news today that 'Debt Help and Advice Ltd' had been placed into administration.

It was reported a while ago here:

http://www.insolvencynews.com/article/17084/personal/debt-management-company-debt-help-advice-ceases-trading

Looks like the Directors have done a bunk with £7.2million of their 3,000-3,500 customers' money.

Clearly, the customers who were in a DMP with this firm (I don't think they offered IVA's) are not going to see their money again, and it has not been paid to their creditors.

...So I guess the customers are back to square one debt-wise, with probably a few £thousand more added to their debt.

Got me wondering: What would happen to an IVA if the firm managing went belly-up?

Any way I can protect myself against this?

longtermplanner

AFAIK another supervisor will be appointed. Your IVA is with your creditors really, not with the IVA firm.

Best way to protect yourself is to choose one of the very large IVA firms at the start. Unfortunately this isn't usually the bext way to get a good, personal service from your IP.

Second best way is to go to a "respectable" firm. Anecdotally I have heard that some smaller firms are struggling at the moment with falling numbers of IVAs, but the good ones won't collapse, they will wind down / sell their book and clients won't lose any money.