Can an IVA be mis sold?

3 years ago I approached a debt help company in Manchester. I currently survive on benefits I claim ESA and PIP. The PIP payment can't be included. So my income is £200 a week. I had debts of £25000. I was told that an IVA would be best at £69 a week. This has been tough for me in the current crisis but when I call still an IVA is best. 

Can I ask if this was the best advice for me? Can you actually be mis sold an IVA? Please help

Comments

  • Yes many IVAs are mis sold. Can I ask why you didn't contact one of the debt charities such as Stepchange who would have given you independent advice?.

    It is something you should have researched fully before signing up.
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  • sourcrates
    sourcrates Posts: 28,512
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    edited 30 September 2023 at 10:53AM
    "Can an IVA be mis-sold" ?

    A very resounding "YES".

    IVA`s are mis-sold on an industrial scale, if your not a homeowner, with a debt of more than £30,000, then an IVA is not for you, the trouble is people respond to Facebook adds, and the first company they see on Google, who nearly always happen to be fee charging debt management companies that pay to be top of the list, and are lead generators for IVA pushers.

    They make large profits from the fee`s they charge, hence why they are mis-sold, and the industry is sorely under regulated, which needs to change.

    "This has been tough for me in the current crisis but when I call still an IVA is best".

    This is because that`s what they sell, they are not interested in what`s best for you, only what pays them the most.
    I`m guessing you rent, and have few assets, chances are a debt management plan or a DRO would have suited you much better.

    Well you have a choice, very little of your debt will have been paid off yet, most of your monthly payments will have gone towards fee`s etc, you can carry on as you are, or you can allow the IVA to fail by non payment, takes about a year all told, then once it`s all filtered down to your creditors, they will write to you and resume collection activity.

    You can then decide whether a DMP or a DRO would suite you best, or you can keep paying, you will have around another 3 years to go, as no re-mortgage in year 5, another year of payments will be the norm.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • fatbelly
    fatbelly Posts: 20,201
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    IMHO the vast majority of IVAs are mis-sold, but because they are virtually unregulated there are no figures on this.

    For example, if you are on benefits or a low income AND do not own property then an IVA makes no sense over bankruptcy.

    If you qualify for a DRO that will always be the best form of insolvency
  • RAS
    RAS Posts: 32,444
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    edited 5 October 2023 at 8:38AM
    Unless you own a home or a Rembrant, it is unlikely that an IVA is suitable for you. 

    You could let the IVA fail (stop paying) and take free advice from Stepchange or CAB in a few months. You may qualify for a DRO when the IVA fails.

    Meantime save up £90 for the DRO fees?
    The person who has not made a mistake, has made nothing
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