why do so many IVA's seem to fail..?

[bagpuss]

Since joining this site i didnt realise you could fail an IVA...having read threads on here i am supprised to hear of lots of IVA's that fail....why is this....can the IP's do more to help...? Could there be arrangements added to make it easier when circumstances change....? What tips can anyone give to people in an IVA to help it complete succesfully..?

I wonder what the % is for failed IVA's and succesful ones..?

Angie xx


My IVA Story......http://bagpuss.blogs.iva.co.uk/2007/09/ ... iva-story/

[northernmonkey]

Is it not that alot of IP's ( and not all Melanie!) are a little bit on the greedy side, push people to commit to something they can't afford i.e. unrealistic payments and because people and frightened of creditors they see a glimmer of light and rush for it without knowing the full details?

I do think that some companies could do a hell of a lot more to help, but then again, everyone seems to be out to make money from peoples misfortune, with a few exceptions of course!

[Lisa2009]

Sometimes i suppose people will accept anything(out of sheer desperation)they think is going to be a sollution after months of worry, without thinking clearly if it is going to work for 5 years.
Unrealistic figures dont stand a chance when you are on a very tight budget.
I'm no expert, just another debtor and i suppose i have been lucky with mine in a way.

[BrassicLintus]

I was considering entering into an IVA and I was so desparate to get out of my debt situation that I'd tried to make my figures "fit" for the IVA (ie I cut my expenditure down so I would have enough surplus to pay into an IVA). But after reading people's posts I knew I was doomed to fail! I had a meeting with Melanie who pointed out that I'd allowed myself just £200 a month to live on (this included travel, food, clothes, haircut, petcare, parking etc), which was unrealistic and there was no way I could have lasted 5 months let alone 5 years on the budget I had set. So i think part of the reason some IVA's fail is that people (and in some cases IP's - though none on here!) "juggle" the figures so that on paper the proposal looks good, but in reality it's a different story. Also a lot can happen in 5 years (marriage, divorce, children, redundancy etc) so if the creditors aren't flexible with variations then again an IVA will fail.

[aguise]

I think there are lots of reasons,having a low disposable and pushing to reach an acceptable figure, accepting modifications that again push expenditure to the danger zone, changes in cirumstances like losing a job, redundancy, illness, there are lots of reasons. One of the most important things is to have your I and E set at a reasonable amount for your own individual needs.

Ang

Please visit my blog at http://aguise.blogs.iva.co.uk/

[tracy.h]

I think so many people are desperate to put an end to the terror that is bestowed upon them when the realisation of situation they are in dawns on them they agree to unrealistic iva's as at the time it gives you a feeling of security and you honestly believe it is a way out.
Sadly and ive been there its not until you realise you cant service the contractual payments or hav'nt read the contract properly or havnt been told all the options you realise its not viable,and for most its to late.
Thats why since finding this forum i understand so much more,and feel lucky to learn more on a daily basis about debt and the options available to people.
We are very lucky that we have ip's that post in there own time to help us.There honesty and advise is something that we are very lucky to have.

Tracy

[Adam Davies]

Hi
Unrealistic living costs creating an unrealistic disposible income are without doubt the biggest cause of failed and miserable IVAs
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

[kah]

I am often stunned reading letters on this forum to see the big differences between the percentages in the pound on different peoples IVAs. I suspect that a lot of us (myself included) panicked and agreed on IPs advice to offer more than we could quite afford to our creditors

[catullus]

This may be a bit of a controversial post but that's what I'm here for!

It's important to understand that the IVA procedure was never intended to be used for the type of consumer debt that is now the norm.It was actually intended to save businesses that were not limited companies and the assumption was made by the architect of the procedure that a person entering in to an IVA was actually quite a sophisticated businessman.

You probably don't know that the Insolvency Act actually assumes that the debtor will draft their own proposal and send it to the IP for consideration. Anyone who has ever seen an IVA proposal will know that would be Mission Impossible for Joe Bloggs.

And that lies at the heart of the conundrum as to why so many people enter in to IVA's without truly understanding what they are letting themselves in for.

The simple fact is that it's a complex subject that I have to say, many many people don't understand, or could ever understand. They simply don't have the knowledge to do so, and have to put their faith in their IP.

The real problem lies in the fact that the IVA legislation assumes that the debtor really understands their own financial circumstances and that, when a draft proposal and I & E is put in front of them, they will read and understand it and take some responsibilty to ensure that it is correct.

Sadly my experience is that probably more than 50% don't even try, assuming that the IP can get it right on their own.Many people quite evidently sign the proposal without even reading it despite the clear instructions from the IP. And I am sad to say, there seems to be a growing incidence of people signing proposals knowing them to be untrue or without having any intention of abiding by their commitments.

In the last week I have probably had half a dozen instances of debtors buying houses whilst in an IVA without the authorisation of the supervisor,using multiple credit cards whilst in an IVA, failing to have disclosed material amounts of debt and fundamentally changing their living circumstances, often weeks after an IVA has been approved,as though they have no moral responsibilty to abide by the terms of the IVA.

Certainly, there are some IP's who exploit this lack of understanding of the debtor, but actually I think that the number of IP's we're talking about is very very small.The real problem stems from the fact that an IVA is actually a highly complex financial procedure that now is used for a growing number of individuals who could never grasp the issues involved because they have never learned to take control of their own circumstances, always assuming that there will be somebody who will do the work for them.

Now before everyone jumps down my throat can I exclude from that last statement most of the posters on this board. The simple fact that you read and may be even post shows that you have an enquiring mind and want to know more. You're prepared to help yourself and from the many posts that I have read here, it is evident that the vast majority know why they got themselves in to difficulty and would accept their responsibilities in an IVA as seriously as they deserve to be taken.

This post is to explain just why things can go wrong for those of you who are interested, and is aimed at the growing number of people who just don't appear to be prepared to take any responsibilty for their own affairs, assuming that the IP will do it all for them. Of course, they are unlikely to read this but it might help others to understand some of the difficulties that IP's experience on a day to day basis.

[MelanieGiles]

I wholeheartedly agree with Catullus' comments above, as I too regularly see and counsel people who have not fully understood the procedures - and it is increasingly common to blame the IP! Some IPs do deserve it, but when clients do not take time to visit their IP personally, believing that things can be ably done over a phone call, I believe that this is where things can start to go wrong.

And I am old enough to remember when debtors actually did draft their own proposals - or their lawyers did! - and you received quite often a bag of nails to work with and unravel before thinking of giving the debtor any advice.

If anyone things that fees are high these days, Catallus and I probably can both remember the days of the lat 80's/early 90's when it was not uncommon to see nominee's fees of between £5k and £10k - but of course these would have been for trading businesses and not relatively small, consumer cases.

Roll on the SIVA procedure I say - designed with the smaller, consumer case in mind, and hopefully a lot easier to understand. And thank goodness for this forum, where all concerned can come along for both technical and life experience based advice.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[MelanieGiles]

I wholeheartedly agree with Catullus' comments above, as I too regularly see and counsel people who have not fully understood the procedures - and it is increasingly common to blame the IP! Some IPs do deserve it, but when clients do not take time to visit their IP personally, believing that things can be ably done over a phone call, I believe that this is where things can start to go wrong.

And I am old enough to remember when debtors actually did draft their own proposals - or their lawyers did! - and you received quite often a bag of nails to work with and unravel before thinking of giving the debtor any advice.

If anyone things that fees are high these days, Catallus and I probably can both remember the days of the lat 80's/early 90's when it was not uncommon to see nominee's fees of between £5k and £10k - but of course these would have been for trading businesses and not relatively small, consumer cases.

Roll on the SIVA procedure I say - designed with the smaller, consumer case in mind, and hopefully a lot easier to understand. And thank goodness for this forum, where all concerned can come along for both technical and life experience based advice.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Adrian Ratcliffe]

Hi Melanie,
My IP said sign here 100 times.
that was it
Regards
Adrain

[Lisa2009]

It seems sometimes that people agree to it , talking themselves into the "i can afford it" thing, i suppose the same way we all got into so much debt. To then realise further down the line that actually they cant afford it. My hubby held onto his papers for days and days to make sure he fully understood what he was getting into and all the implications should it fail. Luckily he hasnt defaulted in 3 years. Granted, things have got tight with th ever changing interest rates. It is for that reason and a few others, we are praying his F&F is accepted.

[catullus]

Hello Skint

I think that your post proves my point.Your hubby took his responsibilities seriously and you are three years in.Plenty don't and fail in the first year.

Best of luck with your F&F

[bagpuss]

I remember going through expenditures with my IP and her asking how much for food...i said we could manage on £300...she laughed and said "not for a family of 5 you cant" and increased it....she did the same with lots of the figues i gave. I thought at the time it was a bad thing cos i thought that the creditors would want to see me living on as little as possible for it to be accepted. But I trusted her and thank goodness i did.

Angie xx


My IVA Story......http://bagpuss.blogs.iva.co.uk/2007/09/ ... iva-story/