Vanguard IVA

BenjaminClarke

Hello, just wondering if anybody had a similar experience with a Vanguard IVA or similar.

So, I had no debts whatsoever 6-7 years ago. I worked full time on a decent wage, around £20,000 a year and rented my accommodation. For various reasons, albeit silly now, I decided to get a loan and a credit card. The loan was for £10,000 and I got it so that I could buy myself a car, among other bits and bobs, and I got a credit card with a limit of £5,000. For the next two-three years I paid these off no issues. The loan amount was down to £4,500 when I was made redundant. My credit card bill was at £4,500 at this point too. I didn't receive a redundancy payout as I hadn't worked for the organisation for long enough.

So I was now jobless with £9,000 worth of debt. Normally I just walked into another job, however, for some reason this time I struggled. A month passed by and I still hadn't secured a new job. I was using what little money I had saved up to pay my rent and bills but this was now down to almost nothing. I spoke to the council regarding help and they told me there was noting they could do for me as my partner was working full time and should support me, which she did! But there wasn't enough money left over to continue paying my debts.

I now know that I should have contacted my creditors directly and organised something with them, I believe they would have been lenient with me and probably given me a three month payment break. However I didn't do this. Instead I panicked and contacted a debt help company that I found online, I can't remember which one, who told me that I could go through an IVA, which would wipe up to 90% of what I owed and put me in contact with Vanguard Insolvency.

I phoned Vanguard and explained my situation to them and asked them what sort of help they could provide. They told me that an IVA would solve all of my issues, that I'd pay just what I could afford and this would vary depending on my income and expenditure, that after five years my debts would be wiped and then one more year after that the IVA would be taken off my credit report. It all sounded amazing to me, I felt that I could pay these guys less than what I was paying in the first place and then be debt free in six years after paying off less than what I owed. I was naive but they really sold it to me so I went ahead with it.

Then it all went wrong. First of all I was made redundant AGAIN from my job in December last year. I spoke to Vanguard regarding this and instead of them showing me support they told me that if I didn't make payments then the IVA would be voided. They told me they would try to negotiate a payment break but this was not guaranteed. I was shocked. I thought these people were here to try and help me get out of debt, now it sounded like all they were bothered about was getting paid. I was afforded a two month payment break but this didn't come without various threats regarding the potential failing of my IVA. This forced me to take the first job that came up as I feared losing the IVA, a position that I really didn't appreciate being put in.

I found a new job and payments continued again as normal for the next two months when, unfortunately again, we were kicked out of our rented accommodation because the landlord decided to sell up. We were given four weeks notice to leave and therefore had to move into the first place we found that we could afford. Now before this we were living in the cheapest accommodation in our town. There were no options for us to move into somewhere cheaper or for the same price, the cheapest accommodation we could find was £100.00 more a month than what we were paying. This brought the affordability of the IVA down to below "Vanguard's threshold" and, therefore, the IVA was voided! They told me that I could no longer afford to pay it. I was furious but accepted the situation for what it was, "at least I have paid off some of my debts" is what I thought. I planned to speak to my creditors and set up a payment plan with them to pay the rest of what I owed.

Two weeks passed and I started to receive debt collection letters again, however, they were for the same amount as before I had the IVA. I spoke to Vanguard again who kindly informed me that all of the money I had paid had gone on their fees. Not one penny of the £2,500 I paid to them over the three year period actually went on paying off my debts.

My conclusion is that Vanguard are just in it for themselves, to make money. At no point did I feel that their goal was to help me become debt free. I think it was irresponsible of Vanguard to even offer me the IVA in the first place as since then I have been told that people with as little debt as myself should have been recommended a debt management plan. Instead I was offered insolvency or bankruptcy... for £9,000 worth of debt... why? For money. They didn't offer me a debt management plan because they wouldn't have been paid.

So where does that leave me? £2,500 down, still the same level of debt, an IVA that will now remain on my credit file for 6 years and a feeling of despair that makes me want to give it all up.

The amazing thing for me though is when I researched Vanguards fees I learned that my creditors, Virgin and NatWest, were only due to get £1,000 of the money I owed them! The other £8,000 was to go to Vanguard Insolvency! Now, had my creditors offered me that same deal then none of this would have happened, I'd have settled the debt within one year and probably now have a mortgage. I am not saying that they should have done that for me but if they do it for Vanguard or other insolvency companies then why not?

Is all of this normal for an IVA? Is there any negligence there in the fact that Vanguard really advised me badly over a £9,000 debt? Surely I'd have been better off with a debt management plan rather than an IVA or bankruptcy, which were the only two options Vanguard Insolvency gave to me at the time?

Thanks,

Ben

Willing2Learn

Hi Ben,

I have to confess that I only skimmed/scanned your post, as it is quite a long read. I hope that the one thing that has come out from this, is that you will have learnt not to pay any 'for profit' companies for a debt counselling service. And hopefully, anyone else reading this thread, will realise that the only companies to approach for debt counselling are StepChange, the CAB, and Payplan and National Debtline as these companies are not in it for profit.

Why not post up your Statement of Affairs (SOA) so that we can offer guidance on your financial circumstances moving forward.

BenjaminClarke

Thanks for your reply.

I am now under a debt management plan with Payplan, which is what I should have been put on in the first place. I honestly think I'd have paid my debt by now had I been given this option.

I totally understand what you're saying and I totally agree. I know now I was naive and my post is essentially warning others to stay away from Vanguard. I am not sure how they are able to get away with what they are doing. Pretending to help people when really they are just looking to make a profit.

Thanks for posting other non-profit debt relief companies, I should have mentioned Payplan in my original post as they have been very good and easy to use. I am on my way to becoming debt free again and then, believe me, the only credit I will ever have is a mortgage!

sourcrates

Lots of IVA’s are mis-sold, and not just by this company, it’s the one insolvency solution open to massive abuse, anyone can set up as an insolvency practitioner, with the right credentials, these private debt management companies sell them “en masse” as they can make large fee’s from the arrangement by doing so.

You can complain about your IP, if you believe you were badly advised, and for a 9k debt, you were.

https://www.gov.uk/complain-about-insolvency-practitioner

BenjaminClarke

Thank you very much for that, I will log a complaint against them for sure.

wwattina

I have just discovered the same problem with a friend totally wrongly advised this company vanguard is only interested in charging u money. Over 3 years iva no money been paid to creditors now she cannot afford to pay any more they are failing it and all monies £1800 conveniently taken as costs! She only owed £6000 to start with very low income . We r going to put in a complaint there must be code of ethics these people should adhere too

sourcrates

wwattina said:

I have just discovered the same problem with a friend totally wrongly advised this company vanguard is only interested in charging u money. Over 3 years iva no money been paid to creditors now she cannot afford to pay any more they are failing it and all monies £1800 conveniently taken as costs! She only owed £6000 to start with very low income . We r going to put in a complaint there must be code of ethics these people should adhere too

Creditors are not paid monthly in an IVA, but at certain times throughout the arrangement, they are called disbursements, and are usually paid from the payments made.
You are correct, though, with 6k of debt, an IVA was a seriously bad choice, same advice above also applies to her.