I’m the CEO of ClearDebt and I’d like to clarify some points in response to the original query and address the points which have been made on this thread.
Firstly, I can confirm that ClearDebt are now in a position to offer people the opportunity to try to save money by reviewing their household bills. For the avoidance of doubt, these reviews are done over the telephone and nobody will be transferred through without their consent only ever when we have our customer's consent. ClearDebt do not receive any referral fee whatsoever for this - the whole point of such of these reviews is to ensure the longevity of each IVA. Any savings which are made will leave the debtor with extra money each month and will not be assessed until the next annual review.
At that point, it is quite possible that other things may have changed within the debtor’s I&E, so it does not necessarily always follow that the debtor’s contributions will increase at the next review.
Conversely, if a debtor experiences a drop in income or an increase in expenditure an income drop or spending rise which left their contributions borderline and possibly unaffordable, these potential savings could well prove to be the deciding factor which prevent the IVA from failing. This is particularly relevant given that ClearDebt, unlike some insolvency providers, will propose IVAs for those with much lower disposable incomes, sometimes as low as £70.
Of course, the possibility does exist that at the next review, there may be an increased disposable income and therefore thus an increase in contributions. Bearing in mind Contributions only rise by 50% of the increase to the disposable income. So, as Supervisor, I will only benefit by a very small amount in comparison to the benefit to both the customer and their creditors.
If, for example, a debtor made savings of £10 per month immediately after their first annual review, they would be better off by £10 per month for the next 12 months (£120 in total). Thereafter, their contributions would only increase by £5 per month, meaning that they are still £5 better off every month (assuming nothing else changed throughout the duration of their IVA, that is an additional 36 months of saving £5, i.e. £180). Therefore, In this example, the debtor would be £240 better off in total over the 4 years since their first annual review. On the other side of the coin, the increase to my Supervisor’s fee would equate to 15% of £5, i.e. 75p per month for 48 months, a total of £36 over 4 years. There would also be an additional £204 going into the pot, which is to the benefit of the creditors.
Now that I have clarified my reasons for offering this service and given numerical examples, I hope that it is now clear to everyone that my potential increased fees if a saving is made are negligible and the main beneficiaries by far are the debtor and their creditors. Obviously, nobody is obliged to make these savings, either by reviewing their spending themselves or with assistance, however I cannot understand why any debtor would not be happy to have more money in their pocket every month and I would be most disappointed to see any IVA fail that could otherwise have been salvaged.
Regards
David Mond
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
