Dealing with significant debt is a daunting experience, and if you’re reading this article it seems you may have decided an Individual Voluntary Arrangement (IVA) is the best step forward in tackling your debts.
However, how to choose the right IVA company from the plethora of debt solution providers out there is another dilemma on the path to gaining financial freedom.
So how do you know which IVA companies to avoid?
In this blog post, we’ll provide a roadmap for navigating the complex world of Individual Voluntary Arrangements, empowering you to make informed decisions and choose the correct partner for your debt solution.
Understanding IVA Companies
IVA companies specialise in the establishment and management of IVAs for individuals with a debt amount exceeding £6,000.
Their objective is to provide debt solutions tailored to their clients’ unique financial situations, helping them regain control of their financial future.
Creditors are not obligated to accept an IVA proposal, but a well-prepared proposal guided by professional IVA advice can significantly improve your chances of success.
However, not all IVA companies are created equal.
Selecting a reliable IVA company is critical to ensuring that your individual voluntary arrangement, a legally binding agreement, is managed effectively and in your best interest.
A bad IVA company can cause more harm than good, exacerbating your financial challenges.
In this blog post, we’ll help you spot IVA companies to avoid, compare IVA companies, and make an informed decision on the best IVA company to guide you towards financial stability.
Want to find out more about how PennyPlan can help you with your debt?
Warning Signs of Untrustworthy IVA Companies
When identifying IVA companies to avoid, it’s essential to be aware of the red flags that signal potential issues.
Some of the key warning signs of an untrustworthy IVA company include:
The charging of upfront fees
Unrealistic promises
Evasion of responding to queries
Unsatisfactory customer reviews
In the following subsections, we’ll explore each of these red flags in more detail, so you can make a well-informed decision when choosing an IVA company to manage your debt.
Charging of Upfront Fees
The charging of upfront fees are a major red flag when assessing IVA companies.
Reputable companies do not require any payments before an IVA is approved.
All insolvency practitioners will have ongoing fees, but these should be integrated into your IVA payments and not require separate payments.
Any upfront fees indicate that the IVA company is more focused on obtaining your funds rather than acting in your best interests, such as helping you establish affordable monthly repayments for your IVA.
By avoiding companies that charge unnecessary fees, you’ll be better positioned to achieve a successful outcome and regain control of your finances at the completion of the solution.
Unrealistic Claims
Unrealistic claims are another warning sign to watch out for when selecting an IVA company.
Be cautious of companies that discuss extremely low repayments without discussing your income and expenditure, or promise to write off an exact percentage of debt without discussing your creditors.
These unrealistic promises can lead to not correctly assessing how much IVA payments will leave you to live on. This only causes disappointment further down the line and increase an IVA company’s failure rate.
By steering clear of companies that make unrealistic claims, you’ll increase your chances of successfully addressing your debt issues and achieving financial stability.
Evasive Answering of Questions
A company being evasive when you ask routine questions about the IVA process is another surefire way of discovering IVA companies to avoid.
Untrustworthy companies may exhibit this behaviour around simple questions such as ‘How do you make your money?’ or ‘What are the negatives of an IVA?’.
By attempting to be evasive during basic questioning that helps you understand the process, it suggests that the debt advisor may be trying to omit information that they feel you may not deem favourable.
By being aware of these signs, you can avoid IVA companies and debt management companies that may not be acting in your best interest and focus on finding a company that is transparent, reliable, and committed to helping you resolve your debt issues.
Poor Customer Reviews
Customer reviews are a valuable resource for evaluating the quality of service and dependability of an IVA company.
Be sure to check customer feedback on reliable, independent review platforms such as Feefo reviews, as well as the company’s own website.
Take note of any recurrent expressions of dissatisfaction, such as grievances concerning customer service or the quality of the IVA process.
If a company is reluctant to disclose the location of reviews, exercise caution, as this may suggest they have something to conceal.
By paying close attention to customer reviews and testimonials, you can make an informed decision when choosing an IVA company and ensure the best possible outcome for your financial future.
The Role of Insolvency Practitioners
Insolvency practitioners play a crucial role in managing IVAs.
Your licensed insolvency practitioner is responsible for overseeing the entirety of an individual voluntary arrangement, ensuring its legality.
They are tasked with administering IVAs for their clients, which includes formulating IVA proposals, presenting it to creditors, and overseeing the IVA for its duration.
Selecting a qualified and experienced insolvency practitioner is essential to ensure that your IVA is handled proficiently and that your interests are duly considered.
By choosing a professional with the right expertise, you can increase your chances of a successful IVA, leading to a brighter financial future.
How to choose the Best IVA Company
Now that you’re aware of the warning signs to watch out for and the role of insolvency practitioners, we’ll explore the key factors to consider when choosing the best IVA company.
In the following subsections, we’ll discuss essential criteria such as:
Reputation
Track record
Affordability
The company’s commitment to finding the right solution for you.
They care about getting you the right solution for your circumstances
It’s important to choose an IVA company that prioritises finding you the best debt solution for your unique situation, rather than pushing you towards a specific option.
Sometimes, this will mean the company will refer you to a solution that does not result in fees for themselves, but it is of greater benefit to you as the debtor.
By selecting a company that genuinely cares about finding the right solution for your circumstances, you’ll be better positioned to overcome your financial challenges and achieve lasting debt relief.
Remember, a one-size-fits-all approach rarely works when it comes to debt solutions, and the best IVA companies will take the time to understand your individual needs and tailor their services accordingly.
Reputation and Track Record
A company with a history of success and expertise in handling IVAs will likely provide better advice and direction when it comes to managing your debt.
Therefore, choosing a company with a solid reputation and track record will provide you with the confidence and peace of mind needed to entrust them with your financial future.
Customer IVA reviews are one such channel that can offer invaluable information regarding the calibre of service delivered by an IVA company.
To evaluate an IVA company’s reputation and track record, examine their website for accessibility and navigability, and review customer feedback on reliable, independent review sites such as Feefo.
Affordable Monthly Payments
Opting for an IVA company that offers reasonable monthly payments is crucial to ensure that you can comfortably meet your financial obligations throughout the IVA process.
When reading reviews on the IVA companies you are considering, look out for mediocre or negative reviews discussing monthly payment. Too many instances of customers complaining the IVA became unaffordable is a red flag.
If a correct financial assessment is carried out by the IVA advisor, monthly payments of your IVA should always be affordable.
This gives you the best possible chance of completing the IVA and becoming debt free.
Experience and Expertise
Selecting an IVA company with a team of experienced professionals is vital to ensure that your IVA proposal is tailored to your particular circumstances and that the process is managed efficiently.
Engaging with IVA companies that lack experience may lead to an inadequate IVA proposal, which could have profound effects on your financial future.
Inadequate preparation of the IVA can lead to issues such as creditors rejecting proposals, or your monthly payments being reviewed at your Annual Review.
When evaluating an IVA company, as questions surrounding their team’s experience and knowledge in managing IVAs.
A knowledgeable and experienced team can offer the most beneficial advice and direction, helping you resolve your debt issues and achieve financial stability.
Want to find out more about how PennyPlan can help you with your debt?
Seeking Professional Debt Advice
Before committing to an IVA or any other debt solution, it’s crucial to seek professional debt advice.
Obtaining expert guidance can provide numerous benefits, such as an objective perspective on your financial situation, assistance in becoming aware of all your debt options, and support during creditor negotiations.
By consulting with a professional debt advisor, you can:
Gain a clearer understanding of your financial situation
Explore all available alternatives before making a decision
Ensure that you choose the most suitable debt solution for your circumstances
Maximise your chances of achieving lasting financial stability.
Alternatives to IVAs
While Individual Voluntary Arrangements can be an effective solution for many individuals struggling with debt, it’s important to consider other debt solutions that may be more suitable for your unique circumstances.
Alternatives to IVAs include;
Debt Consolidation Loan
Bankruptcy
More information on these solutions can be found by clicking their respective link above.
By considering all available options and seeking professional debt advice, you can ensure that you choose the most appropriate debt solution for your financial situation through a reliable debt advice service.
How to Report Unethical IVA Companies
If you encounter unethical practices by IVA companies, it’s important to report them to their relevant regulatory body, to ensure other people do not have to suffer the same fate..
Here are the steps you can take.
Communicate with your insolvency practitioner and submit a written complaint.
Contact their regulatory body such as the IPA, ICAEW or the FCA.
By reporting unethical IVA companies, you can help protect other vulnerable individuals from falling victim to their deceptive practices.
Remember, your voice matters, and standing up against unethical behaviour can contribute to a more transparent and honest insolvency industry.
Summary
In conclusion, choosing the right IVA company is a crucial step towards regaining control of your financial future.
By considering key factors such as reputation, track record, affordability, and the company’s commitment to finding a suitable solution for you, you’ll be able to make a better decision on the best IVA companies.
However, it is important to have evaluated all debt solutions and become fully informed before choosing the best option for your circumstances.
Remember, your financial future is in your hands, and with the right guidance and support, you can overcome your debt challenges and achieve lasting success.
Want to find out more about how PennyPlan can help you with your debt?
Frequently Asked Questions
Who is the best company to go with for an IVA?
If you have decided an IVA is your best option to resolve your debts, we believe PennyPlan would be the best company to manage your solution.
As an ethical IVA provider, we care about helping you on the road to debt freedom.
However, we also recognise the mental toll debt strife can cause.
This is why we offer mental wellbeing services in addition to your IVA that you can use at any point you require during your time with us.
Do I need to meet a good IVA company in person?
You do not need to meet an IVA company in person, however there should always be an option to do so if you wish.
Typically, IVA companies work on a telephone basis, with paperwork being sent to you to review and sign.
Is there a bad side to an IVA?
All debt solutions have have their pros and cons, and an IVA is no different.
An IVA negatively impacts your credit rating and your ability to obtain credit for the term of the agreement.
Does an IVA take all my money?
No, an IVA doesn’t take all your money.
An IVA determines an affordable monthly payment that is based on what is left after you have paid your monthly household bills and living costs. This is what is known as ‘disposable income’.
Why would an IVA be refused?
Creditors have the option to refuse an IVA. A rejection of an IVA proposal at the Meeting of Creditors can happen for various reasons, such as a low return in payment returned to the creditors to make it a worthwhile agreement.
Once accepted however, it is a legally binding contract and your creditors are bound by the terms of the agreement.
What is the main objective of an IVA company?
The main objective of an IVA company is to provide tailored debt solutions, aiding clients in regaining control of their finances.
These companies work with clients to create a plan that is tailored to their individual needs and circumstances. They provide advice and guidance on how to manage debt, as well as helping to negotiate with creditors to reduce payments.
