Is there miss selling of IVAs? Ch 4 documentary

[thebear29uk]

Hi Admin

I would never want to criticise this forum but you make the point about making false claims and how people tend not to claim up to 75% is written off. However this homepage makes claims of up to 70% being written off. Is this appropriate or would an average value give a truer reflection?

I know that some still go through at 25p but with HSBC and NR wanting 40p its usually a higher pence in the pound nowadays.

Regards

Dave

[admin]

Hi Dave,

The BBA stated that 70% would be the acceptable figure to state and this can be justified as follows:

Many creditors accept 25p on the pound as a reasonable write off. Average fees are approx 6k (upper level would be 8k, lower level 4k).

A 120k IVA with 6k fees would be a 70% write off.

However we agree that since this case is possible but rare we have changed the statement on the homepage to say up to 60%. We have also stated that the average is approx 40%-50%.

If you type iva into google you will see that there are still people advertising 75% write off which is a shame as this gives the industry a bad name.

Best,

Admin Team

[jpj]

Dave, I think every IVa varies...mine states I must pay back 18p in the £, effectively writing off 82% of my debt. My IVA is 15 months old now. At the end of the day every IVA is different and it is down to affordability! I think the "up to 75%" statement is reasonably accurate, but should have a * by the side of it explaning that it depends on many factors,including who your creditors are!

[welshman]

I disagree when people say that the debtors don't pay the fees. Who does then? At the end of the day, we pay back x amount of our debt and then whatever for the fees so we are paying for the services ourselves

[Adam Davies]

Hi
No,the creditors are paying the fees because they are accepting a reduced amount and writing off the balance of the dividend paid.
You are making 60 payments[your disposible income]and the IP fees are taken out of this by agreement from your creditors.
The money that you pay into an IVA is your creditors money,that's the best way to look at it.
Regards
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[thebear29uk]

I wasn't criticizing the use of it, merely the fact that one of the points Admin are talking to C4 about is the false claims made by some of the factories that have suddenly appeared from nowhere.

I know all IVA'S are different - I've lost count of the times I've posted replies pointing out the I stands for Individual - but the general rule of thumb these days seems to be 40p return in the £.

Keep up the great work Admin

Thanks

Dave

[jpj]

Admin..how can you say "the consumer does not pay the fees" then say "the fees come from the pot of money that goes to the creditor" !!! well who do you think fills the pot up in the first place!??

And "paying an extra fee makes sense if you get better customer service" You shouldnt have to pay extra fees to get a decent level of service. All IVA firms should offer it anyway!

[Adam Davies]

Hi
They should,but as we know from this forum it does vary from one IVA provider to another.
In all areas of business cost and service go hand in hand and I suppose the insolvency industry is no different.I would have gladly paid upfront if it guaranteed a good service throughout the term of my IVA.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[welshman]

here is another way of putting it. you pay a charity a donation (our IVA pot) who distribute the money to good causes (the creditors and the IVA company). It is the person who made the donation who has paid them not the charity

[Adam Davies]

Here's another one.
You owe me £100,I agree that you can give me £60 if you pay me £1 per month for 5 years but you have to pay it via my mate.I will give him £10[£2 a year] for collecting it and occasionsally chasing you for the money.
At the end I get £50 and write the rest off.
I wouldn,t feel that you had paid my mate for collecting the money that you owed me.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Welsh Boy]

I would hope like Melanie that Debt Management Companies are looked at. My main reason is that unless I am missing something they aren`t regulated and that is a worry. IP`s are a very strictly regulated group of professionals as I would like to think mortgage brokers are also. The need for regulation along with a finance or money management educational program is paramount, I think we should start in schools and hopefully the future generation may not have the same issues or problems that are in society where debt is concerned, I also don`t believe credit is a bad thing it is a case of managing your finances better and starting with education it would be a good initial step. Tony

Mortgage Broker
See me interviewed on IVA TV:
http://www.iva.co.uk/tv/default.asp?id=156

[Adam Davies]

Hi Tony
Are you coming to the debate Wednesday ?
I seem to remember that your very first post on this forum was about debt education.
Regards


Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Welsh Boy]

Hi Andy

I am a huge believer in education and would love to be with you all but have a previous booked appointment that I have to attend. I will look forward to catching up on everything on this site, keep up the good work mate.Tony

Mortgage Broker
See me interviewed on IVA TV:
http://www.iva.co.uk/tv/default.asp?id=156

[jpj]

Andy..thats like saying we shouldnt worry about all the money the NHS has sqwandered because it wasnt our money...it was the taxmans!! (and where did the taxman get it from??...err US !!)

[jamesfalla]

The discussion of who pays IVA fees is an interesting one but I agree with Andy. If you consider contract law, then it is definitly the creditors who are paying the fees and not the debtor.

Lets say the debtor owes £50,000. They go into an IVA and agree to repay back £35,000. This is as much as they can afford to pay. If they could pay back £40k they would have to do so. The creditors (not the debtor) then contract with the IP to supervise the IVA and collect the £35,000 on their behalf. In consideration for this work, the creditors agree to pay the IP's fee. The creditor and the IP agree the level of the fee and when it should be paid. It is their contract and the debtor is not involved in any way.

If the creditors and IP agreed that no fees would be paid, then the debtor would still have to pay back the £35,000. In the same way, if creditors and IP agree the fee to be £10,000, then the debtor is again no better or worse off.

It is of course true that the debtor is the one who agrees with their creditors to repay a certain amount. However, what the creditors then choose to do with this money is their affair. The debtor pays the same whatever fee structure is agreed

James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions for over 10 years.

For more information visit www.jamesfalla.com and visit my blog at: http://jamesfalla.blogs.iva.co.uk