IVA - was I mis sold?

sophiebud

I entered into an IVA in December 2020 after getting into some financial difficulty. When I contacted a Debt Advice company, I wasn't aware of what an IVA was and was initially looking to consolidate my loans.

I was quickly advised that the best option for me was an IVA as it is the quickest, easiest way to clear debt and it will often right off a large amount of my debt. Other options were not explained to me properly and were quickly dismissed as being too lengthy. I took their advice and went into an IVA but having received a pay rise recently, I have re-evaluated my situation and believe I was mis sold. After looking into this further, a debt management option would only take 12 months longer if I stuck to the same payment that was originally set up by the IVA company. The fee that they have added is around 40% of my total debt, which I will now have to pay due to my pay rise, I was advised their fee would not effect me as I would not be paying it.

I was also not advised on the implications relating to obtaining a phone contract, (they told me I would have no issues) and also that moving home would be near impossible.

They also told me to lie about my outgoings so that I was eligible for an IVA as my actual outgoings were not high enough.

I am currently making a complain to the Debt Advice company, following a failed complaint to the IVA company. Do you think I have a good case?

thank you!

sourcrates

IVA`s are one of the most commonly mis-sold debt solutions out there, usually sold under the exact same circumstances you describe above, someone new to debt, who unfortunately chooses to take advice from a fee charging DMC, tells you IVA is the way to go.....and what do they sell ? yep, IVA`s.

We see it all the time on these forums, your not on your own in these situations.

However, once signed up, it can be difficult to extricate yourself, well its actually very easy, as you simply stop paying, but having said that, you must have a new strategy worked out, otherwise things can get messy.

Let me just say that the fee`s you pay in an IVA, are deducted from your monthly repayments, they are not paid separately, and having interest stopped in debt management is not a guarantee either.

It would help if we knew -

(A) How much debt you have
(B) What is your housing status
(C) How much you earn

As a basic rule, we can usually advise from the above information whether an IVA was suitable or not, so if you can provide that info, great, then we can continue.

sophiebud

Thanks for your response. My total debt was £13,500, I was living with my parent and salary was £26,000. 

sourcrates said:

IVA`s are one of the most commonly mis-sold debt solutions out there, usually sold under the exact same circumstances you describe above, someone new to debt, who unfortunately chooses to take advice from a fee charging DMC, tells you IVA is the way to go.....and what do they sell ? yep, IVA`s.

We see it all the time on these forums, your not on your own in these situations.

However, once signed up, it can be difficult to extricate yourself, well its actually very easy, as you simply stop paying, but having said that, you must have a new strategy worked out, otherwise things can get messy.

Let me just say that the fee`s you pay in an IVA, are deducted from your monthly repayments, they are not paid separately, and having interest stopped in debt management is not a guarantee either.

It would help if we knew -

(A) How much debt you have
(B) What is your housing status
(C) How much you earn

As a basic rule, we can usually advise from the above information whether an IVA was suitable or not, so if you can provide that info, great, then we can continue.

sourcrates

In that case it appears you fell victim to the hard sell for an IVA, yes it would have been an option for you, but probably just not the best one, perhaps a DRO would have been better, if you had met the criteria, or as you say, debt management.

Well the choice is yours, carry on as you are, or fail the IVA by stopping payment, but bear in mind that can take anywhere up to a year or more to sort out though.

You should take advice on your situation from someone with nothing to sell you, like National Debtline.

What are your thoughts on this, what do you think you should do now ?

fatbelly

It's very difficult to make a successful complaint re mis-selling of an IVA because they are not properly regulated. Hence mis-selling is rife but can hardly ever be proved.

Debt Camel has the best article on IVA complaints here

https://debtcamel.co.uk/complaint-iva/