Debt is something that many people now have to deal with in their lives. For some, it is easy to manage it themselves without any help, but for others this is not the case.
For those people they need to seek advice and perhaps approach their debt in an entirely different way. Often with something such as an IVA or Individual Voluntary Arrangements.
Whilst the idea of an IVA seems like a preferred method to try and get yourself out of debt, an IVA is not always the right approach to take. In fact, both the Money Advice Trust and StepChange Debt Charity have expressed concerns about IVA lead generator companies and their part in the process.
What are they concerned about?
So, what is the concerns of these key organisations? Both of them believe that there should be an amendment made to the professional standard applied to the insolvency industry. Particularly when it comes to how they protect those that could be seen as financially vulnerable from any harm.
What harm can this cause?
In particular, they have both highlighted how IVA providers are actually paying for referrals to be made from lead generation companies. This means that the option of an IVA is actively encouraged and promoted to people in debt. Rather than simply being there as a way out of debt for you to explore at your own choice. They believe that this industry should be more stringently checked. Also that there should be stronger rules for those insolvency practitioners who accept referrals from lead generation companies.
You may wonder what harm it can do to accept leads from companies with regards to IVA’s. After all, surely you would just arrange one if you wanted to? Regardless of an advert? The truth is, this isn’t actually the case.
The main thing to keep in mind is that these adverts are not always presented in an accurate fashion and much of the time the IVA is shown in a misleading way. This could then encourage the financially vulnerable to choose an IVA when it is not the right approach for them.
They are also concerned that there will be an incentive to showcase online adverts, all on the basis of paying out referral fees. This will then encourage the lead generation companies to think about different ways that they can advertise. They could even make themselves seem like a debt advice charity, handing out advice. Instead of what they are, which is advertising.
What should you know about IVAs?
The important thing to remember is that, an IVA is not always the right approach to take for dealing with debt. It can, when taken out by the wrong person, actually cause more issues in the long term. Therefore, if it is thought that this option is being “advertised” and “promoted” rather than being carefully considered ; then this could have serious implications for the person concerned.
In fact, rather than being led by what you see online, you should seek advice. This is particularly true if you have debt that you are finding hard to manage. It is a much better idea to think about what is going to be best for your needs and your circumstances. Then you can find an approach to solve your debt issues and get yourself on the right track.