Mis-sold IVA - know if your IVA has been wrongly sold to you

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Having debt worries and thinking about an Individual Voluntary Arrangement (IVA)? You’ve come to the right place. Every month, over 170,000 people visit our site for advice on debt solutions.

In this article, we’ll explain:

What an IVA is
How to know if an IVA has been wrongly sold to you
What to do if things go wrong with your IVA
How to tell good advice from bad advice
What you can do next if you’re struggling with unaffordable debt

Navigating financial difficulties can be challenging, and it’s common to feel unsure about seeking help. In fact, Citizens Advice revealed that 60% of adults facing financial difficulties hesitate to seek assistance.¹

If that’s your case, don’t worry — you’re not alone. We’re here to help you learn more about IVAs and how to make sure you’re not being wrongly sold one.

What Does a Mis-sold IVA Mean?

At times the Individual Voluntary arrangement might be wrongly sold to you.

This could happen if you aren’t fully informed about all the details, leaving room for potential hidden clauses or even fraudulent practices.

If you’ve entered into an IVA without a clear understanding of its terms, conditions, and the circumstances involved, and later discover that you’ve been overcharged or subjected to undisclosed terms, it indicates that you’ve been mis-sold an IVA.

How to Know if Your IVA has Gone Wrong

Many factors play an important factor in an IVA, however, to detect why or how your IVA has gone wrong you must keep some important points in mind:

Debt and Cash Payments do not match

If your payments to the creditors are greater than the reduction in your debt (excluding miscellaneous expenses) that means the money is not wholly being used to pay off your debt.

This might be an indicator of a wrongly traded IVA, however, it does not always mean that an IVA has been sold wrongly.

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Some debt solutions can:

Stop nasty calls from creditors
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Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:

Situation

Monthly income	£2,504
Monthly expenses	£2,345
Total debt	£32,049

Monthly debt repayments

Before	£587
After	£158

£429 reduction in monthly payments

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Excessive Extra Payments

If your insolvency practitioner has been asking for extra payments, which might not have been a part of the initial agreement, it also indicates a derailing of an IVA.

Usually, the IVA comes with all the payment details, such as the monthly payments and aggregate annual payments, etc.

» TAKE ACTION NOW: Fill out the short debt form

Who is liable if Your IVA has been Mis-sold?

If you feel like your Individual Voluntary Arrangement has been wrongly imposed upon you by your agency or if you are facing a failed IVA due to your IP, you might be able to pass a claim on them.

What Can You Do Next?

There are several options to go by, first of all, you can file a claim against your IP or the company who mis-sold an IVA to you.

You can demand all procedural fees back, the debt advice, and the management fee back as well.

Secondly, you can even ask for compensation, the financial damages that you have to incur due to bad management and misselling, you might be able to get compensated for that if you opt for a legal procedure.

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FAQs

Can I Get a Compensation for Mis-sold IVA?

That will depend on the legal procedure and the verdict of the court. However, it is also possible that you might get to negotiate with the firm who traded the IVA to you and get compensation directly from them. In my personal experience, if you have a strong case, it won’t be hard to get compensation in court as well.

Should I change my IVA firm or IP after a Mis-sold IVA?

Yes! If you deem your IP or firm responsible for this mismanagement then you should change your IP and firm. There might be some extra costs involved in changing your IP but these costs are worth paying for a secured financial future.

Does my IVA end if I change my IVA Firm?

No! Your IVA remains intact with your creditors if you change your IVA firm. The agreement may go on as it is, or your IP might be able to negotiate better terms with your creditors and alter the agreement. Apart from that, you don’t have to worry about your agreement being ended.

Where Can I Get Good IVA advice?

Many good advisors can give out good debt solutions. You might be able to get good advice from a professionally qualified debt manager, qualified ACCA, or different debt management companies.

When is an IVA considered failed?

It might fail when one of the parties has terminated it or breached the terms, apart from that if you are unable to pay back your creditors, the agreement might be considered a failure. There are many cases when an IVA failed at final review as well. The most common reason for that is poor debt management.