Debt Secrets

IVA secret 6:
Once you are certain that an IVA is best for you, go directly to an Insolvency Practitioner

Debt Management companies do offer a debt advice service. In addition they justify the fees on the basis that they ensure the IVA receives approval. Their argument is that you will have an advocate for your IVA, but the fact is that, besides giving initial advice, their overall value is, in my opinion, questionable. There is little that a debt management company can do that a customer focused Insolvency Practitioner cannot also do.

Sometimes Debt Management Companies claim that by collating your Statement of Affairs for the IP they are doing work cheaper and that saves on fees. That is not the case. An IP usually has an assistant prepare a draft of the Statement of Affairs anyway, so, if you come to the IP reasonably prepared the IP’s assistant can quickly organize it and present it to the IP for review.

If you want to do an IVA, you are probably better off going directly to the Insolvency Practitioner after you have taken initial advice that an IVA is the best move for you.

IVA secret 5:
If most of your debt is owed to one creditor then consult them first before you try to do an IVA.

As 75% (in value) of your creditors have to vote in favour of your IVA proposal there is no point in going ahead with the IVA proposal if that creditor does not already view it favourably.

For example, if you owe £80,000 to five creditors and you have an unsecured loan for £61,000 with one of those creditors then that creditor has 76% of the vote – a sufficient percentage for that creditor to cast the deciding vote on whether you can proceed with an IVA or not.

So you should save yourself time and hassle and consult with them first either about the possibility of an IVA or you might even try negotiating a settlement to your debts (see the options and template letters in the resources section). In any case many IPs stipulate that you should have at least 3 creditors before they will arrange an IVA for you.)