Misled by IVA

jojebauk

In March the start-up I worked for went insolvent and I was unemployed; I had about £10k of credit card debt and one of the cards was about to come to the end of a 0% interest period, so the interest was going to skyrocket. And without a job I couldn’t apply for another card to switch it over to... My brother said he could loan me the money but not until next year. In the meantime I went onto a government debt advice website and went through to a financial service agency, who recommended an IVA. They told me I would have five years to repay it and then a year after that my credit score would be wiped clean. I asked if I could pay it off earlier than the 5 years (thinking of the loan from my brother) and they said yes, and then said the IVA will still remain on my credit score for a year after it’s paid off. What they didn’t explain was that even if I paid it off tomorrow, the IVA will stay on my credit for the full six years – NOT a year after the amount is paid off. I never would have agreed to that. I feel sick to my stomach and trapped in the IVA. Does anyone know what I can do? I’ve started a formal complaint process with the financial service agency but not sure if that’ll get me very far.

[Deleted User]

Your credit files always show the last 6 years of history, so you don't have any basis for complaint.

jojebauk

Surely I do if they’ve told me something otherwise? 

[Deleted User]

You can complain about anything you want, but it's not going to change anything.  You can't unwind the IVA and whatever you do, you're still looking at 6 years.

The advantage of the ICA is that it's a fixed 6 years, rather than struggling on with the cards  for a decade or more.

jojebauk

I appreciate you taking time to respond but I’m not sure you’ve read my issue here. I’m not complaining because I don’t like the reality of the IVA, but because that’s not how it was sold to me. And I wouldn’t have been struggling with the cards as I would’ve borrowed that from my brother, as an interest free loan. Would rather have had that than having a ruined credit rating for such a long period of time.

Grumpelstiltskin

You say government debt advice website. Which website exactly was it?
A genuine one should have referred you to one of the debt charities eg. National Debt Line, Stepchange, Payplan, CAB.
I can't see one of them advising an IVA  for £10.000 without a lot of discussion with you.
.

sourcrates

You fell for the sales spiel of an IVA lead company offering you a govenment backed scheme to get you out of debt, yea, i`ve read all the ad`s, you were basically sold an IVA, when infact it was probebly very unsuitable for you.

IVA`s are designed for homeowners who have an asset to protect, so cannot go bankrupt, although there are no limits either way, unless your debts are well over 40k, an IVA is not the right choice generally speaking, but regulation is lax in the IVA industry, virtually anyone can sell them, as there are big profits to be made through fee`s.

Its clear the advice given was seriously lacking, as any debt solution will affect your credit file for at least 6 years regardless of option chosen, you can complain here -

https://www.gov.uk/government/publications/insolvency-practitioners-guidance-for-those-who-want-to-complain/insolvency-practitioners-guidance-on-how-to-complain-about-an-insolvency-practitioner