Michael, agreed there are no winners in a failed IVA. However, there are degrees of losing and it's not the IP risking bankruptcy.
The fees matter, because bankruptcy - right or wrong - is not automatic on an IVA failing. Too many IVAs are sold by IPs as a form of statutory debt management plan rather than an alternative to bankruptcy. Even Harpic is suggesting thatit is a DMP she would return to if the IVA fails.
The bottom line is that 1 in 3 to 1 in 4 IVAs fail and consequently fees and their impact on the remaining balances in such circumstance really do matter.
Just catching up with this thread and there are some very valid points raised, not least the issue around the ongoing misconception of "fees" and the "free sector". I think it would be good if there was a "dispatches" type programme to get underneath a lot of it and also around the payday loan sector. Of course with plenty of good PR for the good guys and recommendations for this forum too!
With regard to IP fees my personal view is the debate is more about the term "frontloading" - it sounds negative when in fact all it means is that to begin with a higher proportion of the monies paid in covers the work to date. If it were not for the hard work of the IP and their team in the first place there would be no IVA so I see no issue there but yes, if an IVA fails then the balance owing may still be near to the original amount if early on. I agree with Michael though, if an IVA fails then bankruptcy would normally be the next step in which case it doesn't affect the debtor how much debt is left.
Regards, Tina Shortland, Debt Advisory Manager for Melanie Giles at Debt Advice TV.
If you’re looking for effective debt related information, articles and news, then go now to our on-line advice service at www.debtadvicetv.com
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Andy, that's a big question. Perhaps just for starters I'd like to see real transparency in the selling of the product - spelling out the risks and the charges. Look at what it's taken today just to get a half-admission that fees are front loaded and what the consequences of that could be. This also overlaps with the issues surrounding IVA companies contracting with claims companies on inflated terms and refusing to follow Guidelines and disclose the financial arrangements between the two. I'm afraid the list could go on and on and I doubt anyone wants that or for someone like me to set the forum agenda. I got the message on that when the Payplan thread was locked.
Tiger Tiger you are right in wanting more transparency where it is currently lacking. In the absence of that I go back to always recommending people do their homework properly on who to approach for advice and help to ensure they are getting good sound advice and are given as much information up front as possible. It is time well spent.
Regards, Tina Shortland, Debt Advisory Manager for Melanie Giles at Debt Advice TV.
If you’re looking for effective debt related information, articles and news, then go now to our on-line advice service at www.debtadvicetv.com
If you’re ready to ask us for specific advice or help, then get in touch at www.call-me.debtadvicetv.com so you can start to free yourself from the stress and anxiety of overwhelming debt.
Tiger I think you raise good points but w ecan only speak for our own firms. I accept there are abuses within this industry and I like Tina am all for transparency and I would like to see more published data.
The PPI situation is a mess as was the VAT issue but it is affecting every firm and should not detract from the mostly good work we as an industry carry out.
Michael the PPI issue is affecting customers rather more than firms. The CCCS, for instance, sees no duty at all to its creditors to start contracting with claims firms and yet they deal with exactly the same creditors as all other firms. The suspicion therefore has to be that some firms see the issue as an opportunity rather than a duty. Suspicions are then increased when those same firms agree inflated commission rates with the claims companies and refuse to follow OFT Guidelines and disclose any financial arrangement they might have to their customers. Real transparency would put a stop to this and Forum experts should contribute to that by not allowing company reps to come on and either evade the question or flannel the public. There's too much graciously thanking them for their time and not enough cross examination.
TigerTiger the ethos of the forum is respect for all and that includes the companies that post on here. I think it is valuable to have the likes of Payplan on here so I don't want it to be a continued bashing for them. My view was that they answered the questions that you put to them on the thread that I locked and from experience threads can quickly get out of hand.
My guess is that you are a professional and your knowledge and input are very welcome on here, however this forum is not just a platform for professionals to air their views, I must ensure we keep a fair balance and do not scare off genuine people in debt from asking questions and seeking advice.
Andy, I've tried not to impose a 'view' on what I've posted, just be persistent in getting questions answered. I don't think the questions were answered on the locked thread but, in a way, not answering the question is often an answer in itself.
I do respect the Forum you've built, but I think I shall withdraw from it rather than rock the boat any further.
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by TigerTiger
Andy, that's a big question. Perhaps just for starters I'd like to see real transparency in the selling of the product - spelling out the risks and the charges. Look at what it's taken today just to get a half-admission that fees are front loaded and what the consequences of that could be. This also overlaps with the issues surrounding IVA companies contracting with claims companies on inflated terms and refusing to follow Guidelines and disclose the financial arrangements between the two. I'm afraid the list could go on and on and I doubt anyone wants that or for someone like me to set the forum agenda. I got the message on that when the Payplan thread was locked.
I agree that a lot depends upon which firm you approach ... but then again a lot also depends upon the prospective client doing some research and asking the right questions.
I can only speak from my experience, but my firm were very transparent when it came to discussing fees and gave me a lot of information on the risks.
In all industries there are always good, bad and mediocre, which is why we, as a forum, advise those looking at IVA's to research and to speak to several companies.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I would like you to stay posting TigerTiger, you knowledge is an asset to the forum, I have no problem with your postings, I just wanted you to respect and accept my decision for locking the thread in question
Andy, I did want to make one last post re Debt Free Direct and their use, along with Tenon and Payplan, of Equity in Finance. A lot of posts tried to get the DFD rep to explain the financial arrangements between the two companies given the apparently excessive fees being charged for PPI reclaims. As you know , although any customer of DFD has a right to know under OFT Guidelines, they didn't get anywhere. However, DFD is part of Fairpoint PLC and the following is an extract from their last accounts :
'We will continue the programme of PPI claims management activities across our IVA and DMP portfolios which we expect will have an additional positive impact on our results for 2012.'
'The Group receives income in relation to claims management activity, principally for refunds of PPI in relation to its current client base.'
