IVA secret 3:
Vested interests might be pushing you into an IVA when bankruptcy is a better solution
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Remember that the debt management companies and Insolvency Practitioners have a vested interest in you going ahead with an IVA as it will be all the more lucrative for them. They will typically try to prod your conscience so that you reject bankruptcy in favor of an IVA. They will emphasize your moral obligation to at least make some attempt to pay your creditors back (and at the same time pay them between £4,000 and £10,000 odd in fees! – (The median cost of an IVA is about £6,500)). While you and I may both agree that it is good, important and honest to pay your debts, you should not restrict yourself to a five year arrangement that places your family in a tight budget regime and which if it fails would only end in bankruptcy anyway. Having said that, however, an IVA may indeed be the best solution for you, just make sure you have considered all the options including bankruptcy.
One of the favourite lies of the sales people is to invite you to participate in a “government scheme that assists people in debt”. There is, of course, no such scheme run by the government and unless you are a very large bank they certainly won’t be paying off your debts! The government did however introduce the legislation to allow IVAs but they weren’t originally intended for the vast majority of people.
Maintain a healthy scepticism when talking to sales people in general. Also do note that debt management companies are now legally obliged to tell you all the other options available to you. Also do beware of “anonymous advice” on internet forums where debt management advisers and Insolvency Practitioners from IVA factories can be lurking.