IVA support and discussion thread

Hi

There is sometimes a big issue made of the 6 year period on getting further credit.

A fair point perhaps would be that lenders will not be too keen on giving credit to those who have been in any formal debt solution even after the 'clearing' period has elapsed.

There are probably a fair percentage of IVAers who would not really feel the need to get into substantial or any debt for that matter again anyway.

It could be argued that this 6 year rule 'advantage' of an IVA is just another marketing and selling angle for IVAs and again I point to the shocking high percentage of IVAs that fail.

I don't really agree on your point about moving the goal posts as a DMP is an informal agreement therefore arguably the debtor is significantly less trapped - just look at the PPI issue to see my point.

I also think you may be a bit low on some of the monthly private DMP fees

As far as interest and charges are concerned in DMPs the advice industry are and indeed should be addressing this, the protocols are being touted it would seem.

If people manage their own Debt Management Plans then there are no fees or donations to the profit makers or so called charities so the creditor return is more.

Again I will pose these questions that nobody seems to want to answer or properly address -

Are people who are currently in IVAs being approached by brokers with regard to secured loans where the terms of their IVA are clear on the 12 month extension equity clause and if so, why?

As far as independent impartial advice is concerned, how can anybody justify such huge percentages of PPI claims going outside the arrangement - ex: not to the IVAer or the creditors which are the actual people I thought the IVA was supposed to be all about?

The truth is that where profit, financial interest in a solution and debt advice is concerned, then it cannot ever be classed as truly independent and impartial as more an more people are cottoning on to.

The way me and others are seeing things then it seems to be getting to the stage where people are going into debt solutions where they will never be debt free, the exceptions being Debt Relief Orders and bankruptcy, but of course there is little or no profit or financial 'donation' in the latter two solutions.

Then there is the issue of falling incomes as we see on the TV and read in the newspapers almost everyday now - what is being done to help the people in debt solutions where this is the case anything? or maybe the cynic in me has a suspicion that we are moving the goal posts.

Oh, I just happen to have picked up the papers on the Stepchange 2013 expenditure allowance budget figures while I type, really interesting on the clothing allowance and other sections.

Think this review and figures could hit the screens soon and could be an interesting discussion point especially given that according to what I have been told the CFS & Stepchange trigger figures are being looked at for the purpose of 'harmonising'

Really interesting, cant wait for any Stepchange comments:)

My take

Hi

I thought it would be worth mentioning this before any potential further comments

One of my colleagues has just had a go on the debt remedy tool and tells me that it does appear that there is now no minimum for clothing and footwear when a single adult is inputted, even more interesting is that the food \ housekeeping minimum suggested amount has been reduced to £110 per month - I am sure it was previously set at £115 per month.

mmm, real food for thought, very important issues and surely at least worth comments or an explanation from Stepchange??

The Stepchange expenditure allowances are mentioned in the IVA protocol and used in IVAs, their own DMPs and Debt Remedy Tool.

Setting payment amounts and reviews!

Stepchange are almost 100% funded by the creditors and receive donations from creditors in relation to their Debt Management Plans.

There is also another widely used and industry recognised set of expenditure guideline figures called the Common Financial Statement (CFS) that are updated on a regular basis - as far as I know none of these figures have actually been reduced. A number of the CFS expenditure allowance figures are much more generous and again the CFS is clearly mentioned in the IVA protocol.

Very interesting discussion points indeed given the context of this and other threads for that matter.

Who's going to be first?

My take

DC - you have covered a lot in your last 4 posts!!!

I understand your point about the formalily of an IVA arrangement being potentially a disadvantage (as you correctly point out: You are trapped). You either have to let the IVA: 1. go to term; 2. fail - be back to sqare one with your creditors, face possible BR; or 3. Be in a position to offer a 'Full & Final settlement'.

I agree as well tha your credit rating is not the be all and end all. Nor am I suggesting that insolvent people want a pristine credit rating again to get straight into more bad debt. But it means more than that: Access to 'proper' bank accounts, renting property, car/van hire, mobile phone contracts, being able to pay your insurance monthly, finance a half-decent, reliable car etc. Additionally, for home owners: yes, the ability to shop around for a better mortgage deal occasionally, is a considerable advantage.

Furthermore, the question asked by many creditors about previous 'special repayment arrangements' - or similar terminoligy, applies to DMPs and IVAs alike.

I can maybe live without some of the above privileges for 6 Years, but for 15-20? Not something I would wish on anyone in a hurry.

Regarding the question re: equity release you pose about how IVA customers are approached by loan brokers: In all the cases I have read about, the customer alleges that a particular company has been suggested by their IVA provider. Cosy arrangement don't you think?

Where can we find the latest SC Budget guideleines? The lowering of allowances could be interesting at review time!!! (Though I am more interested in the 'guideline' and 'maximum' allowances, not the 'minimum' - of course that could be zero in most categories.

As I have alluded to previously, I have it on good authority from IPs posting on other forums, that creditors argue the toss over applying the CFS or SC Budget Guideline figures, often insisting on the latter. Well they would wouldn't they: Another cosy arrangement: insist on the application of the tighter figures, drawn up by their buddies at Stepchange (in turn funded by the exact same creditors), to maximise return.

I agree: what is the point of allowing CFS in the protocol, if nobody is in a position to use them? Does anyone know if any IVA firm applying CFS?

Hi DC,

Fair points to an extent, we do hear of people regularly struggling when bills go up etc.

As you say, if you spend more in one area you have to cut back on another - but that's life for everybody, not just IVA customers.

OK, so my gas/electric bill goes up £20pcm. So what?

'Normal' people, what do you do? Cut back in other areas? Oh no, nearly forgot - it goes on a credit card - and we all know where that leads.

I would advise switching to a better deal. Heck, if you refer yourself to u-switch via MSE, you even get a free case of wine!!!

Simple fact is, if IVA customers cannot wait until review time, you can contact your IVA company and, lousy customer service aside in some cases, you should be able to argue for an immediate adjustment in IVA payments.

Most IVA's allow for a 15% reduction in payments without your IP having to seek creditor's permission. So it should not be a big deal frankly.

In many cases mid-term IVA-ers, have had IVA-repayments increase because of rise in income, so in these cases payments can be reduced to allow for increased bills, whilst still meeting creditor dividend forecasts.

I also say that it is important to claim against ALL the allowances that the Stepchange budget guideline allow. Even if you don't use them for that purpose, it helps in scenarios like this.

I do concede however that many IVA customers are hovering on the brink of financial viability. Those who are deemed to be able to afford to repay £100ish per Month when their IVA was proposed.

What has happened in many cases is the IVA company has stopped making allowances once they reach this figure, as doing so would make the IVA a non-starter. Victims of IVA mis-selling in a nutshell.

Even small increases in outgoings for these cases is a huge problem, and could ultimately cause the IVA to fail. Then they are back to square one.