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In this short guide, we’ll discuss the top 5 things you need to look for when choosing an IVA company so you can erase your debts and have peace of mind that the future will be better.
First, let’s take a look at what IVA companies do.
What Is an Individual Voluntary Arrangement (IVA) Company?
An IVA company helps individuals deal with debt by brokering an agreement with creditors, known as an Individual Voluntary Arrangement. All IVA companies have insolvency practitioners to work with both debtors and creditors to find a suitable solution.
When an IVA goes into action, any interest on your debts is frozen, and the company deals with all communication from creditors, so you don’t need to worry.
As an individual, you can’t try to set up an IVA on your own, but there are plenty of specialist companies available.
The question is, how do you choose the right one for you?
Are All IVA Companies Reputable?
An IVA company is regulated by the Insolvency Practitioners Association, but that doesn’t necessarily mean they’re 100% reputable. As with any debt management provider, there will always be some companies that see clients as a way to make quick money – but they’re rare with IVA’s.
To make sure you can find a reputable IVA company, you should consider various factors, including being aware of the red flags.
Signs of a Bad Debt Management Company
If you’ve ever seen those TV adverts guaranteeing everyone a loan, you’ll know that only individuals in desperate need of money would apply. Why? Because these loans often come with excessive interest rates.
IVA companies aren’t all made equal, and some might make promises or guarantees that no reputable agency would make.
Bold Claims With No EvidenceIf an IVA company makes claims that seem too good to be true, it probably is. Be very cautious of any promises made by debt management companies and ask for evidence to back up their statements. For example, most reputable IVA companies will tell you that it’s possible – but highly unlikely – that they can include your mortgage and other secured debts in the IVA. So, if a company claims they can do this, you should look elsewhere.
Making GuaranteesNot everyone is eligible for an IVA, and all creditors have the final say as to whether the proposal will go ahead. No company can make a guarantee that your application will go through, so it’s best to steer clear of those that do.
Asking For Large Upfront PaymentsAll IVA companies charge an arrangement fee, but most will include it in your monthly payment plan, so you won’t have to worry about paying large amounts upfront. If a company does ask for a large upfront payment, they’re probably not sure whether they can secure the IVA for you and want a quick payment so they can make money.
No Contact With CreditorsIf the IVA company you choose isn’t in regular communication with your creditors, there’s a good chance they won’t be able to secure your IVA. A significant part of securing an IVA is getting your creditors to agree to the proposal. Maintaining contact and communicating with creditors is central to an insolvency practitioner’s service, so it’s essential to ensure your chosen company has a good track record of working with debtors and creditors.
How to Spot Good IVA Companies
So, how do you choose the right IVA company for you? Well, just as there are signs of IVA companies to avoid, there are also some great companies out there that can find a debt solution and help you recover from the financial crisis.
Let’s look at the signs of a reputable provider.
They’ll Explore a Range of Debt Solutions
When you go to an IVA company, you’ll probably find that they offer customers a range of debt relief solutions. An Individual Voluntary Arrangement isn’t the only debt management scheme out there, and in some cases, it might not be suitable.
A good insolvency practitioner will go through your eligibility and offer other solutions, such as a debt relief order.
You Can Visit The Company at a Physical Location
While a physical location doesn’t necessarily mean that any company is reputable, it’s a good sign if debt management companies have offices. The internet has given us so many wonderful things, but the sheer accessibility it offers means ‘companies’ looking to make a quick buck from people in desperate situations.
As people in debt are often looking for a way out, it’s easy for untrustworthy companies to take advantage. If your IVA company has a proper office, and you can visit them, it shows they’re a reliable debt advice provider.
No Upfront Fees
While debt charities can help you find a solution, they can’t arrange the Individual Voluntary Arrangement without a licenced insolvency practitioner.
Just as mortgage brokers charge a fee to arrange property finance, your IVA company will too. But, that fee will be included in your affordable monthly payments. If the company asks for an upfront amount, it’s best to stay away.
Great Reviews From Customers
As the saying goes, the proof is in the pudding – and it couldn’t be more accurate with service-based companies. Most will display testimonials on their website, which is a positive sign, but reviews collected from a reputable website will give you complete peace of mind.
Two of the best resources for impartial reviews are Google My Business and TrustPilot. Both display testimonials from customers, so you can get a good idea of how the company you’re looking at has helped previous clients.
Choosing the Best IVA Company
There are plenty of reputable IVA companies around. While charities like the Money Advice Service can offer advice, a licensed service provider will be able to assess your financial situation and put together a compelling IVA proposal.
The main things you should look for are whether the company has a low failure rate, offers a free consultation, and advises on other debt relief solutions.
Once you have a good idea of the IVA companies in your area, you can look at all of the factors above and make an informed decision.
Book a Free Consultation With a Licensed Insolvency Practitioner
At IVA Advice, we believe that everyone should have the opportunity to recover from debt and repair their credit file. Regardless of your circumstances, we’ll always go out of our way to find an effective solution that makes your life easier.
An Individual Voluntary Arrangement is a legally binding agreement, but it can change your future. If you’d like to discuss your options, please feel free to contact our friendly team. We look forward to helping you pay off your debts, receive a completion certificate and rebuild your credit rating.