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I am in an IVA but have been told that it may not be my best option – what should I do?

Date: 14 February 2011, Author: James Falla

If you have recently started an IVA you may receive a letter suggesting that it might not have been the best solution for you and that you have not been given all the facts. We consider what this means and the action you should take.

Once you have entered into an Individual Voluntary Arrangement (IVA) your name and address is included on the Insolvency Register. This document is a publically accessible via the internet.

Your name and address are also published in the Stubbs Gazette. Anyone who is interested can find out that you have recently started an IVA through one of these sources.

Do not stop your IVA payments

Over the past couple of years, a number of companies have sprung up who write to people who have recently started an IVA and suggest that they may not have been given the right advice and that there may be alternative options.

Generally the objective of these companies is to suggest that you stop paying your IVA so that they can help you with an alternative solution (generally bankruptcy) for which they will charge you a fee.

It is very important to understand that if you receive one of these letters, you should not stop paying your IVA. This could have extremely serious consequences for you particularly if you are a home owner.

If you own a property and you stop making the payments into your IVA, the insolvency practitioner may be forced to fail the arrangement. This could lead to you compulsorily being made bankrupt and your property being force sold.

Double checking the advice

The main options for dealing with your debt that you should have considered include a debt management plan (DMP), individual voluntary arrangement (IVA) and bankruptcy.

If you are dealing with a reputable IVA firm you should have been properly advised about all of these options and chosen an IVA because it is the right solution for you based on your personal circumstances.

If you are concerned that this was not the case or that you may not have made the right choice of debt solution, then you should make your own independent enquiries.

Of course you can speak to your Insolvency Practitioner (IP) and ask them to clarify the benefits of your IVA to you.

However, if you feel uncomfortable doing this, you can also speak to a reputable independent debt advisor who will normally be happy to offer you advice for free.

On line forums

Alternatively use an on-line debt forum. There are many of these available and they are a great way of getting independent views from both personal debt experts and other people who are going through the IVA process.  

Generally speaking, you should have chosen to carry out an IVA because you believe it is the best solution for you given your personal financial circumstances.

During this process you should have considered the alternative options such as a debt management plan and bankruptcy and be comfortable that you have made the right decision.

If this is the case, then there is absolutely no reason to question the decision you have made and you can put any letters you receive that question this in the recycling bin.

However, if you are concerned or worried, it is always worth getting a second opinion. But remember, if you are contacted by a company out of the blue it is likely that they have a financial motive. It may therefore be best to speak to an independent debt advisor of your choosing first or log on to an on-line forum.

Source: Beat My Debt