How to Spot An IVA Company You Want to Avoid

Wondering which IVA companies you should avoid? You’ve come to the right place for answers. Every month, over 170,000 people visit our website for advice on debt solutions.

In this helpful guide, we’ll explain:

• What an IVA is and how IVA companies work.
• How to choose the right IVA company for yourself.
• The signs of an IVA company to avoid.
• How to complain about an IVA.
• The best IVA companies in 2023.

From July to September 2023, the Gazette reported that there was a total of 13,965 Individual Voluntary Arrangements.¹ This figure highlights the importance of choosing the right IVA company —a decision that can indeed be tough.

Don’t worry! With our expertise and understanding, we’ll guide you through your options and help you make the best possible decision.

Let’s dive in.

UK Personal Debt 2022 Update:
There were 29,291 individual insolvencies in England and Wales in March to May 2021, a fall of 8.6% from 32,047 for the same period in 2020.

(Source: The Money Charity)

Companies to Steer Clear Of 

When you’re suffering from debt problems, the last thing you need is an issue arising from the debt solution you’ve opted for. 

However, this is something that’s far too common.

I often see IVAs fail because debtors are not properly guided by their insolvency practitioners.

Of course, if you’re already in an IVA and are dealing with an IVA company, you can’t do much about it except for either cancelling your IVA or complaining about your insolvency practitioner.

However, today, I’d like to talk about some telltale signs that you can look out for which will help you avoid these unethical IVA companies. 

Make sure that when looking at different insolvency practitioners, you have your eyes peeled for these red flags so you don’t end up in a worse situation than you were in the first place. 

Unrealistic Claims 

Always make sure to beware of IVA companies that make incredulous or unrealistic promises such as “reducing your debt by 90%”. 

While it’s true that an IVA can reduce the amount of money you owe, claims such as this one are fairly unrealistic and are an indication that you will be manipulated and lied to throughout the entire process. 

Unusually High Rate of Failure

You have the right to inquire about an IVA company’s failure rate. 

While it’s true that not every IVA can be successful, a very high IVA failure rate can be cause for concern. Keep in mind that around 15% of IVAs fail so avoiding a company with a percentage much higher than that is a good idea!

Bad Reviews 

Of course, this ties into what I mentioned earlier about reviews of IVA companies. 

Client reviews are a great resource for getting advice about which company is worth opting for and which one isn’t. 

If an IVA company has a majority of negative reviews, you should definitely look towards other companies. 

Best Companies to Get an IVA

Here are some of the best IVA companies in the UK in 2023.

1. Financial Wellness Group
2. StepChange
3. PayPlan
4. Bennett Jones
5. Forest King
6. Begbies Traynor Group
7. Astute Financial.

If you would like some more information on the best IVA companies, check out my guide.

How do I Choose the Right One? 

Before you opt for any one company, it’s important to get debt advice to determine whether an IVA would even be the right choice for you or not.

Sometimes, IVA companies themselves offer free sessions to determine whether an IVA would be suitable for your situation or not.

You can also get professional debt advice from independent debt charities such as Stepchange and National Debtline.

Once you’ve determined that an Individual Voluntary Arrangement (IVA) is definitely the best debt solution for you, then you can start looking at IVA companies. 

When you’re trying to find the best IVA company for yourself, here are some things to look for: 

No Upfront Fees 

It would be extremely detrimental for you to opt for an IVA company that needs you to pay more in upfront fees. 

Always opt for an IVA company that does not charge money for the initial introductory meeting and setup process. 

Please note that almost all insolvency practitioners will most likely have ongoing fees but they will be a part of your IVA payments. You will not have to pay those fees separately. 

IVA companies which charge you money for the introductory meeting should be avoided at all costs. 

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Reputation and Reviews 

It’s a great idea to look up reviews online of IVA companies that you’re considering. 

Getting an opinion from individuals that have actually used an IVA company’s services can be a great indicator of what your experience will be like if you choose to opt for an IVA with them. 

Always try to go for an IVA company that has been operational for a relatively long time and has a majority of positive client reviews under their belt. 

While it’s true that a relatively new IVA company with fewer reviews can provide you with high-quality services, it’s still a risk that you really don’t have to take. 

It’s fairly easy to look up online reviews and find the IVA company that you think would work best for you. You should always do this before you opt to apply for an IVA with any organisation. 

Affordable Monthly Payments 

Of course, you’re going to want an Individual Voluntary Arrangement where your monthly payments are low and thus, affordable. 

One big factor that can end up increasing the amount of money you have to pay in your monthly payments is your IVA company’s fees and your Insolvency Practitioner fees. 

Of course, companies with higher fees will have higher IVA contributions per month than companies with lower fees. 

Thus, it’s important for you to look at different IVA companies and choose an IVA company with a lower fee so you don’t have to pay too much every month. 

When you’re planning a budget for debt management during your IVA, your insolvency practitioner is going to help you make it.

It’s important to have an IP that is sympathetic towards your situation rather than someone who is only looking to have their fees extorted from you. 

How Do You Complain?

The IVA complaint process is relatively straightforward.

If you are unhappy with your IVA, the first thing you should do is talk to your IP. They can advise you on your best course of action and amend the terms of your IVA if it would be appropriate.

I recommend that you send in your complaint in writing and hold onto a copy for your records. That way you have proof of your complaint and when you sent it.

If you are not happy with your IP’s response, you can complain directly to the Insolvency Service.

They will look at your complaint and deal with your IP’s registered organisation if necessary.

If you feel that the Insolvency Service has not dealt with your issues properly, you can make a complaint directly to GOV.UK.

Were you advised to get an IVA by a debt management company but you now think that this was bad advice? You could complain to the Financial Conduct Authority (FCA).

All debt management companies are bound by the rules of the FCA which means that they have to give you the best advice for your specific financial circumstances.

If you think that your debt management company did not give you the best advice, you should make a complaint.

If you are still unhappy with how your complaints have been handled, you could make a complaint to the Financial Ombudsman Service (FOS).

Keep in mind that the FOS will only get involved with your issue if you have given your IP or debt management company a reasonable length of time to sort out your complaint.

Contacting the FOS with a complaint should really be your last resort or if the behaviour of your debt management company gets inappropriate.

References

1. The Gazette – UK individual insolvency statistics: Q3 2023