IVA Companies to Avoid

You are struggling to repay your debts and understand after speaking to debt management companies for debt advice, an IVA is the best choice for yourself. But are wanting to make sure you use one of the best IVA companies in the UK?

An Individual Voluntary Arrangement (IVA) is a legally binding debt solution to your unsecured debt problems to help you consolidate all your unsecured debts into one monthly affordable repayment plan.

There are plenty of other debt solutions available including debt management plans, debt relief orders, debt advice or trust deed if in Scotland. We strongly advise you take the debt quiz here to confirm an IVA is the best solution for your financial circumstance.

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In this guide, if you have decided an IVA Debt plan is your preferred solution we will make you aware of any bad IVA Company to Avoid within the UK.

How do Different IVA Companies Work?

An IVA application is handled by an insolvency practitioner (IP) in the UK.

An IP is a person that manages your IVA process from start to finish.

The IVA process begins with setting your IVA proposal, dealing with all the creditors you owe money to, all the way up to you finishing your last repayments.

How do IVA companies actually work

An insolvency practitioner (IP) could be working independently or be part of a larger company that offers different debt management solutions to meet your requirements.

The choice of IP is a crucial part because they run the whole application from handling your money paid to deal with your creditors directly to set up repayments to them.

You want to choose an insolvency practitioner that knows what they’re doing and are sympathetic to your situation.

Let’s dive in to see what you should look out for to avoid any bad IVA companies.

What To Avoid With IVA Companies?

Different companies have different fees so it is important to compare the top-rated IP’s before opting for an IVA.

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

Bad Reviews and Reputation

Research the reviews and reputation of the legitimate IVA company you are looking to package your application with.

Review platforms online like trust pilot, feefo and google my business profiles are a good way to check the reputation online.

Make sure to look at reviews to see how reputable the IVA company you're dealing with is

Research online reviews and find the best IVA company for yourself.

Just like when purchasing a product you would research reviews and choose what you feel is the best to meet your own situation.

No responsible IVA company will Charge Upfront Fees

There are many of the best insolvency practitioners that charge zero fees upfront.

IVA companies that make you pay upfront fees for the initial setup should be avoided at all costs

It would be crazy for you to opt for an Individual Voluntary Arrangement company that requires you to pay fees upfront.

Select an IVA company that does not charge fees upfront for the initial introductory meeting and Individual Voluntary Arrangement setup process.

Not Affordable Monthly Payments

An insolvency practitioner should run a full disposable income check to see what monthly payments are affordable for personal circumstances.

The best IVA companies are sympathetic to your situation when talking about your incoming and outgoings.

It is important to have a legally binding agreement on an affordable monthly payment plan because the monthly repayments will last a total of 5 years.

The IVA company’s fees form part of your debt repayment plan in the monthly payments.

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

So if an IVA company have higher fees this will make your IVA contributions higher per month than certain IVA companies with lower fees.

Unrealistic Claims

Check the IVA companies are not over-promising with non-viable claims.

Unrealistic claims from IVA companies

Some markets “reducing debts by over 92%” and although this can be true it is very rare for such high amounts to be written off.

If a money advice service is claiming the 92% is an average they are being fairly unrealistic and are an indication that you will be manipulated and lied to throughout the entire IVA process.

High Rate of Failure

You can ask the IVA company you are talking with about the company’s failure rate.

An IVA can be declined based on the debt levels, affordable payment plan, types of debts and failure that can happen during an IVA application.

But if an IVA company failure rate is much higher than the average (which is about 18%), then they are an IVA Company to Avoid.

Final Thoughts

There is a lot of choices to choose from when it comes to sourcing the best IVA company.

When researching in IVA forums you will find some negative feedback and lists of the worst IVA companies in July 2024.

The IVA providers need to make sure anyone entering into the debt repayment plan can afford the IVA payments set out in the IVA proposal. If you want further advice there are debt charities on hand like citizens advice who offer individual voluntary arrangements.

Compare some of the top-rated insolvency practitioners and select the best practice to suit your financial circumstances.

What are our final thoughts on how to avoid bad IVA companies

An IVA is a decision that you definitely should not rush.

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Here are some popular questions asked regarding IVA applications and insolvency practitioners.

Do Insolvency Practitioners Charge Fees?

Almost all insolvency practitioners will charge ongoing fees with your IVA.

The fees will form part of the agreement and be part of your monthly payment plan.

Do insolvency practitioners charge fees

Once you have agreed on an affordable monthly repayment debt management plan you will not have to pay any IP fees separately.

Who is the best IVA provider?

The best IVA companies are updated in real on the best IVA company list.

The best IVA provider is chosen from:

  • Online Reviews
  • Fees Charged
  • Service Provided
  • Disposable Income Checks
  • Success Rates
  • Free Debt Advice
  • No or little IVA Company’s Failure Rate

What debts Cannot be included in an IVA?

Not all debts can be included in an IVA application. Debts that cannot be included are:

  • Hire purchase agreements
  • Maintenance Fees ordered by a court
  • Child support services
  • TV licence debts
  • University student loans
  • Mortgages and secured loans
  • Magistrates’ court fines
  • Social Fund loans

What Debts can be included in an IVA?

When you get an IVA you can include the following debts:

  • Catalogue debts
  • Personal loans
  • Debts to family and friends
  • Overdrafts
  • Payday loans
  • Credit card debts
  • Vets bills
  • Gas and electric arrears
  • Council Tax arrears
  • Water arrears
  • Store cards
  • Income tax and national insurance arrears
  • Tax credit or benefit overpayments
  • Invoices for building work

Does An IVA Ruin Your Life?

Clearing your debt with an IVA shows you are on the road to recovery from the bad debts you have built up.

An individual voluntary arrangement (IVA) can negatively affect your personal and professional life, and make a dent in your credit score.

Talking with a debt advisor for free debt advice can get you the best debt solution and may make things easier for you.

Does an IVA ruin your life

But the IVA is a debt solution to rebuilding your already damaged credit profile and you can improve your financial situation in the long run to become debt free.