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IVA Companies To Avoid: The Dos and Don’ts

Written by, Marija Petkova

Updated September, 16, 2022

When looking for debt solutions, you’ll likely come across many companies that offer IVA deals.

While IVAs can be a suitable solution, there are many IVA companies to avoid that seek to take advantage of certain financial situations and potentially leave customers worse off than they were before. 

So, what are the IVA companies to avoid and why?

Let’s find out.

How Does an IVA Company Work?

To get an IVA, you need a licensed Insolvency Practitioner (IP) who is in charge of managing different parts of the agreement, such as handling your payments and dealing with creditors. 

An Insolvency Practitioner can be working independently or with a company that offers IVAs. 

If you opt for an IVA company, then they’ll manage your IVA from start to finish, including 

applying for an IVA, negotiating with creditors, and figuring out how much you can afford to pay toward your debts.

Different IVA companies have different fees and charges. Before choosing one, you should first get debt advice on whether an IVA is a right solution for you. If that’s the case, it’s important to do your research and compare offers.

Red Flags For IVA Companies To Avoid in the UK

Although there are plenty of exemplary IVA companies out there, some don’t have the best intention at heart when it comes to helping debtors. 

Here’s what you should look out for when shopping around for IVA companies.

  • Unrealistic claims

Companies that make unrealistic promises like ‘eliminating/reducing your debt by 90%’ are highly unlikely to keep them. 

While it’s true that an IVA can reduce your debt, there are limits to what this type of agreement can achieve, and over-promising usually suggests that the company is either inexperienced or untruthful.

  • Unusually high rate of failure

As a potential customer, you have the right to ask about the company’s failure rate. A low success rate usually indicates that the company is referring consumers for an IVA when they do not qualify.

  • Bad reviews

Reviews are a great reflection of a company’s trustworthiness and reliability. 

Reputable IVA companies always include testimonials on their sites and point potential customers to places where they can find more reviews about them. 

If a company has too many negative reviews or too few, then it’s probably best to avoid it.

  • Unreasonable charges and payments

Debt and IVA advice, as well as any help that a debtor may need with a basic application, should be free.

There are standard fees that IPs and IVAs companies charge, but they’re all included in your monthly payments, which you start paying once the IVA is set. If you’re looking for IVA companies to avoid across the UK, then it’s those that try to charge you upfront.

  • They don’t discuss all of your options

Every IVA company has an ethical duty to present customers with all available debt solutions to help them make an informed decision.

This is because there are different debt solutions available out there, and an IVA might not be the right one for your situation.

  • They rush you

Entering an IVA is a big financial decision, and it’s best to take time and consider all of your options and discuss them before jumping into it. 

When dealing with debt, it’s always better to act now rather than later, but your IVA company should not pressure you into a decision with ultimatums and time restraints. 

Did you know: Getting an IVA can stop creditors from getting a CCJ against you. Here’s how you can remove a CCJ.

Signs Of a Promising IVA Company

Here are some things you should look for in an IVA company: 

  • Affordable monthly repayments

The IVA company’s fees are part of the monthly payment that you’ll need to make toward your debt as part of your IVA agreement, so it’s important to factor in how much you’ll need to put aside and whether that suits your budget.

One of the most important things that an IVA company should do for you is to negotiate a plan that you can afford.

  • Regular communication

An IVA company should present clear contact details and maintain fast responses with customers. Once you’ve signed an IVA, you should be updated on every step of the agreement and should know what is happening at all times.

  • Accessible

In a world where most of us spend a lot of time online, it would be suspicious of an IVA company not to have an online presence.

Reliable companies have websites that are easy to navigate and informative, even for the less tech-savvy people. It’s best to avoid companies that insist on home or office visits.

  • Private and confidential

A legitimate company is expected to be as transparent as possible about how they handle customers’ information, whether they share any of it with third parties, and why that’s necessary. 

A good IVA company should have an easily understandable Privacy Policy, per GDPR guidelines. Not having one signals that it may be breaking the law.

  • Legitimate IVAs and Insolvency Practitioners

For an IVA to be legal, it has to be handled by a licenced IP – someone that is authorised by the Insolvency Practitioners Association. 

Many IVA companies have in-house IPs that can deal with your IVA, and if you’re not sure, you can ask the company to provide you with information that can assure you that the IP is licensed and can legally oversee your agreement.

You may be interested in: Can You Get a Mortgage With an IVA?

Bottom Line 

An IVA is a formal and legally binding agreement between you and the creditor that helps you pay back what you owe in affordable monthly instalments over a set period of time. Since there are many companies that offer these types of services, it’s important to know what IVA companies to avoid and how to spot a good one when you see it. 

If the IVA company you’re dealing with is not as transparent as it should be, is pressuring you into taking out an IVA, or is not presenting you with all available options, it’s best to look elsewhere.

My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.