IVAs are a way for people to get out of debt. It’s an agreement between the person who has incurred debts and their creditors that can help them become debt-free again. The problem is, there are so many IVA companies in the UK, it can be difficult to know which one will best suit your needs.
In this post, we’re going to give you 10 steps on how you can pick the right IVA company for your circumstances and what signs would indicate if they were a good or bad choice.
Step One: Your IVA Company Will Charge You Fees
You will be charged a monthly fee by your IVA company. This fee can vary from one company to another and it’s worth researching what the average charge is, as well as if you’re able to negotiate this fee with them or not.
Be particularly cautious if the IVA company does not charge you a fee for its services. It is always nice to get a free consultation, but an IVA does involve a lot of costs, such as to assigning an insolvency practitioner or setting up a payment arrangement. It costs money to set up an IVA so be prepared to pay for it.
Step Two: Your IVA Company Should Offer You the Right Debt Solution
IVAs are a very common debt solution because they allow transference of unaffordable debts into one monthly payment, however, a reputable IVA company will always be clear about whether an IVA is right for you or whether you need to consider other debt solutions.
Consider doing some basic research into all the options before you call them.
Step Three: Your IVA Company Should have a Fixed Address
It’s always a good sign if your IVA company has a physical address. This means that they’re more likely to be legitimate and, as such, less of a risk for you.
Companies that have no street address or use a PO Box, are considered unreputable. Instead, you should look for IVA companies that provide detailed information about the company, as well as details of the Insolvency Practitioners and how the process works.
Step Four: Your IVA Company Should Be Responsive
If their phone lines are constantly busy or you can’t get through on email – it’s a good idea to find another IVA company.
If you cannot get in contact with your potential IVA, they will likely be very unresponsive when it comes to times of need and this isn’t what you want from an organisation that could help save your finances.
Step Five: Your IVA Company Shouldn’t Charge You Big Upfront Fees
When your IVA company charges you big upfront fees, this is a sign that they’re less ethical. Even though it has been suggested that an IVA should charge you a fee, question why they are charging you huge fees.
This may be because their monthly fee isn’t enough to cover the costs of setting up an IVA, so they make it difficult for people by charging them more in one go.
You would need to do your own research into this as there are no professional or legal guidelines on what IPs can charge.
Step Six: Your IVA Company Should Offer You a Guaranteed Acceptance
An IVA Company will never guarantee your IVA acceptance. The reason for this is that IVAs start with a proposal and that proposal is sent to the creditors.
Creditors can reject or accept the proposal made by the Insolvency Practitioner. So, when a company tell you that they have 100% acceptance rates, be extremely sceptical as there are no guarantees with IVAs. If you hear a company say that they can’t guarantee it then it is most certainly a trustworthy one.
Step Seven: Your IVA Company Should Offer You a Consultation
It’s important to have someone who will work with you and offer advice. This is what your IVA company should be doing. They shouldn’t pressure you into signing anything either – their role is to help guide you in the right direction not scare or intimidate you out of it.
Step Eight: You IVA Company Should Not Offer You Unlikely Terms
The role of an IVA company is to help decrease or write off your unsecured debt but getting a secured debt, such as a mortgage on the IVA terms is a hard one to propose. Those who make these claims are being unrealistic with the expectations of the IVA.
Step Nine: Your IVA Company Will be Realistic About Your Monthly Payments
If your potential company is warning you about how much money they’ll get each month or trying to make it sound like this is more than what you can afford – then take a step back. A good Insolvency Practitioner will always consider your personal situation by looking at your monthly budget and so on.
The first thing they will do is to understand whether an IVA is the right solution for your financial situation and the next step is to figure how much can you realistically afford to pay your creditors but also still feel comfortable in living within your means.
Step Ten: Your IVA Company Should Have Reviews About Them
Most IVA companies will have a website and a reviews section generally at the bottom. When doing your due diligence into the company consider the reviews. Reviews are a great way of people talking about their experiences either online or through word of mouth so you can use these to get a sense if they are trustworthy or not.
So which IVA company is right for me?
There are so many IVA companies out there, it is hard to sift through the ones that are the best. The right IVA company will be the one that has a good reputation offline and online, a low IVA failure rate (ask to see the evidence) and most importantly help you improve your debt problem.
However, before you get to the stage of searching for an IVA company, do your research beforehand on what other debt plans could be right for you. Make a comparison between them all. The more knowledge you have of your situation, the less likely you are to get stung by an unethical IVA company.