Hi again Mike, nice to see you are still around :)

With consumer bankruptcy soaring at the moment and the 'free face to face' charities more or less overwhelmed then where can people who are in desperate need of such advice go?

In my opinion a gap in the debt advice sector (bankruptcy & IVA area especially) opened up approx 20 months ago, some people saw it coming, others did not as maybe they were more pre-occupied with what they were doing themselves.

Leaving out the much debated ethics of the IVA to bankruptcy side and all that goes with it, I think I more or less agree with you regarding fees, having said that I suppose it depends on the definition of bankruptcy advice / assistance / support and the amount of time involved to what fees are charged.

From an Independent view I think this whole issue, sadly, is now repeating itself and will drag on for a while longer yet before eventually running its course.

With the above in mind I think its now best left with others to battle it out here, and no doubt elsewhere, so last post from me on this subject and sincerely hope you enjoyed (and maybe even respected) the input.

Good Luck

Pincer

I'm now getting worried about Debt Cleanser UK Trying to find out who's behind it. They aren't a limited company, so it's a bit more difficult this time round. Unfortunately it seems this kind of scam is here to stay. I'm not against charging a small flat fee for some bankruptcy advice, as long as the advisor is qualified to do so and properly regulated. I guess £350 might be reasonable for a sole trader with multiple properties, etc but for your everyday consumer that is outrageous.

Hello again Mike, are you well?

Interesting info,

The IVA Council may no longer operate, however Im sure you are aware there are many other IVA to bankruptcy 'assist outfits' around now not to 'disimilar' to the IVAC who in my experience are still having a real impact on the IVA Industry.

I came across one such outfit not so long ago - that during a 'home visit' advised the person in the IVA that he could assist them with bankruptcy if they would transfer the IVA standing order payment into his account for if I remember correctly, 14 months, yes 14 months !! The person in the IVA thought this was a little strange and despite him (in their words) being somewhat pushy they did not sign and with this he left as he told them he had many more home visits to conduct!!

I must admit I found the above shocking and unbelievable, but after further thought on this sorry subject, maybe not.

While on the subject of bankruptcy assists I have heard the going rate for advice and what some have and still do refer to as 'simple form filling' is now £350 for a single person and £500 for a couple, funny how things change eh Mike, talk about U turns, never, cartwheels, handstands and triple axels spring to mind.

Oh! and does anyone know what happened to the petition?

Wry smile time again Mike ?

Pincer

Although this blog has become very quiet, I thought it worth mentioning that the IVA Council no longer operates. In an interesting development, UK Bankruptcy Ltd has been put into provisional liquidation on a petition by the Secretary of State. UKB has also ceased trading.

It is very unfortunate that so many people have been conned by their very persuasive sales techniques, but at least they have finally got what was coming to them.

Hi again Bucking Bronco,

Thank you for your reply.

Interesting, but to be honest a shade paradoxical to me, nevertheless thanks anyway.

Pincer

Hi Pincer,

What I was referring to us that as recent as 2 years ago IVA companies could charge between £7-10k per case. This was highly profitable for IP's. The trend more recently has been for the creditors to restrict the fees to between £2k and £4k on average.

Taking into account the additional work required (e.g. quarterly payments as opposed to anually) and the reduced fees IVA's are much less profitable. It may be that IP's will be forced to refuse the lower end cases with the lower fees as they cannot make a profit on them.

Any IP's that were only putting forward IVA's because they could make a big profit have left the market for more profitable ventures, the "quick buck". Those that remain are proposing IVA's in a highly regulated environment, offering best advice and a valuable service.

Bucking bronco

Hi there Bucking Bronco,

Interesting post and some fair points.

'Gone are the days of a quick buck from IVAs' ?

Would you mind elaborating a little further on what you mean by this comment?

Pincer.

This additional evidence that suggests that out of the 108,983 live IVA's only 4% have made it to the fifth year. Where has this information come from? This is a ridiculous figure to quote. Out of those IVA's how many are actually 5 years old? I bet it is a small percentage. I work for an insolvency practitioner and we have nowhere near the failure rate that you suggest! I recommend that you get your facts correct before posting incorrect information and misleading others! This sounds like it is being quoted from the Integrity mailshot (another of the misold IVA brigade).

I agree that accross the industry some people may have been advised in the past. More recently however the regulators have become far stricter in the advice that must be provided to clients. IP's must document what advice is offered and the client must sign and agree to this. I also think that a lot of IVA factories are falling/will fall by the wayside as creditors are restricting fee's whilst also requiring additional work. Gone are the days of a quick buck from IVA's.

Many of the IP's still around offer a more complete picture of the options and clients are fully aware of the facts of DM plans, bankruptcy, remortgages etc and choose an IVA because they feel it is the best option at that time. Just because a year later their circumstances have changed does not mean that they have been missold!

To all those considering bankruptcy do not listen to companies sending mailshots advising you to go bankrupt or that you have been missold. Speak to your IP and failing that speak to the Citizens Advice Bureau or an independant organisation that is non profit making.

Hello all,

Well it is quite a while now since the IVAC website / Forum went down and from what I can see it does not look like it will return, on the other hand the UKB site is still going strong (I recently read through it). I must admit that I did find the IVAC website / Forum fascinating, different and somewhat quirky at times, but nothing lasts forever in this world and things always move on.

With the above in mind I would think that anyone who has followed this debate and / or has some knowledge of the Debt Advice Industry / Sector / would agree that this along with other developments has had an impact right across the board and continues to do so. Of course opinions will still be divided depending on which side of the debate you are on or indeed if you are independently minded. Just how many people have followed the IVA to bankruptcy route as a result of all this and indeed due to other circumstances is not clear as I dont believe there are any official figures available, however I do know the courts are very busy. One interesting off shoot of these changing times (from what I can see) has been the rise of a new 'ish' type of Debt Adviser- 'The Assisted Bankruptcy Specialist' just goes to show how things move on.

In my experience the coming three months are usually the busiest in relation to people seeking advice on their debts and finances and thats without the so called credit crunch / rising repossessions etc. With this in mind Im sure all the good people on here and out there hope the same as I do, that they all get the right and proper advice which is best for them, be it from the fee charging or the free Debt Advice sector.

Pincer

I totally agree. What good valid points.

I know all about the IVA's and in the end just decided bankrupcty was the only option as I don't own my own home.

This company has been ringing me about my mums IVA as she is too ill to deal with anything. I told them we didn't want to proceed and be charged £1000 for bankruptcy as I had filed my own petition for bankruptcy. I asked UKB to not call again and they did for 3 more attempts and have heard nothing from them since.

Please beware also of the companies who charge hug fees for IVA's. We all know who they are.

Get advice from the CAB first. CCCS weren't able to help me at all.

By way of an update. My own assumptions regarding the connections between the parties can be found in my post of 3 May 2008 earlier in this thread, though they were not too far wide of the mark ...

Anyway a bit of legal reporting for you to digest ...

Injunction obtained against Sean Mason, Shane Mulroy, Tobias Gooden and UK Bankruptcy Ltd (UKB)

David Mond (together with his businesses: ClearDebt and Hodgsons) were successful in their application for a freezing injunction against Mason, UKB and others, resulting in a judgment in their favour made by Sir Charles Gray at the High Court last month.

Sir Charles was satisfied as to the link between the IVAC and UKB; and as the transcript of his judgment says, he “arrived at the clear conclusion that, for the reasons advanced …. a good arguable case is made out that the First [Mason] and Fourth defendants [UKB] are responsible for the actions of IVAC, including the sending of the letters to which I have made reference.”

Further, Sir Charles considered the argument made on behalf of Mr Mond that the IVAC was a front for Mason and UKB and that they had sought to hide their involvement in its activities. He said: “I take the view for the purposes of the present application that there is evidence that they have been acting in what is a commercially dubious scheme. There has been less candour than one would expect from parties to litigation in the way in which the case has been developed on behalf of the Defendants. Information about IVAC has been slow in arriving, as indeed has information about the relationship between Mr Mason and Mr Lindley and the close connections of the latter, at one time at least, with UKB. I am in no doubt that the condition which requires a claimant seeking a freezing order to establish a risk of a dissipation of the assets is clearly made out on the evidence.” He therefore approved the continuation of a freezing order which would cease if £100,000 was paid into Court.

At the time of writing it is unclear how and in what way the IVAC and UKB intend to continue their activities or the language they used in approaching people in an IVA.

The above statement was released yesterday.

Hi all.

Just read a VERY interesting BBC news article on debt 'cold callers' with regards to 'selling' IVAs and the rest.

If I have read it right, it appears that some companies are to be investigated with regards to cold calling people for (wait for it) 'urging people to take out IVAs'

The article goes on to mention other 'controversial' issues surrounding IVAs which may be of interest to some (or not as the case may be) and is well worth a read in my opinion.

Simply unbelievable.

Heres the link for those who may be interested.

http://news.bbc.co.uk/1/hi/business/7515095.stm

Pincer

No news on the legal situation I'm afraid, although the IVA Council's website has been down for a week. What about the legal cases UKB have been promising? Any progress?

Credit files don't "wipe off" everything before a bankruptcy order. All creditors should show as 'settled'. The IVA and bankruptcy order will both show, although I agree that practically speaking it will be hard to get credit at all (especially in the current climate) regardless.

If someone's health is failing, or their income has dropped in the long term for whatever reason, and their disposable income is insufficient to make an IVA viable, they will almost certainly be better off going bankrupt if they don't own their own home. A good IVA provider will tell them this and assist the debtor to petition for bankruptcy, if the Supervisor doesn't petition themselves.

If anyone isn't getting this level of service, they should contact the licensing body of their IP, as I keep saying. What they should not do is take unprofessional and very expensive advice from unregulated, pushy salesmen. If you're claiming your IVA provider pushed you into an IVA and wasn't offering the right advice, don't fall for the same trick twice by allowing yourself to be pushed into bankruptcy and paying over the odds for it. Take up your concerns with recognised bodies.

Mike: Absolutely; they are being sued for mis-use of the register and for providing misleading information, as well as defamation

Any news on how this legal case is going? Obviously I won't be trying to get my money back from them if what they were doing was entirely above board...

Mike: A failed IVA and subsequent bankruptcy order is probably the worst record you could get

Erm... everything before the bankruptcy gets wiped off. Any form of insolvency is the worst record you can get whether it's an IVA or a bankruptcy, doesn't really matter, no-one will touch you with a barge pole for 6 years from discharge (statute of limitations etc).

Do you think people should be scared into remaining in an unsustainable and insolvent circumstances? They shouldn't have borrowed the money in the first place. Yes we both know that irresponsible lending has been setting up a situation in which these sorts of things happen. And we both know that peoples' life circumstances change. We both know that some IVA companies are very swift at demanding excess income when a client's income increases, and woeful when it comes to lowering payments.

So if you have an individual, maybe one whose health is failing, whose IVA company are simply ignoring them and demanding the money from their benefits to pay off an IVA into which, arguably, they were misadvised. Do you simply throw them on the scrapheap and say "tough luck, you should have known you would get cancer / heart disease / whatever, you should have known what the small print meant, I'm going to keep taking my £1500/year supervisor fees, anyone who tells you anything else is being deceitful"?

Or do you say "you know what you would be better off going bankrupt".

And if you say "go bankrupt" would you simply leave them to it? Or maybe have information from the CAB - what with free advice being worth exactly what you paid for it? Or would you turn to them and say "ok, I have staff here who have worked for the insolvency service, I have a legal team, I have doing bankruptcy petitions for the last 10 years, I have read the OR's technical manual and have a pretty good idea how to ensure that all the legitimate expenditure that you have is properly exempted. I can help ensure that your case is dealt with as quickly as possible by presenting the information in as much detail as required, BUT this is a business, this is a service, it will cost money, arguably it will save you money over the next 3 years, but I have to charge for my work, it's worth what you pay for it".

Different strokes for different folks. I don't think we should be discrediting any of the possible solutions out there. IVAs work - and work well - where creditors agree they are viable and debtors are likely to stick to them. Bankruptcy works where this is not the case. The problem comes when people who would be better off going bankrupt are scared into an IVA to delay the inevitable. They have been enticed into an IVA under false pretences - "in an IVA you'll still be able to get credit" - no you won't - "in an IVA you'll be able to keep your house" - no you'll have to sell it because you cannot perform the equity release in the 4th year in any other way. All the IVA industry does by misleading people is give the IVA industry a bad reputation - and trustworthiness takes years to rebuild. Right now the industry is in disarray just when it's needed the most. The whole insolvency industry needs better regulating because an awful lot of people are getting some awful advice right now.

I can tell you now i am not xxxxx & have no idea who xxxxxx is. Fraud is taking money & not doing the job. As I have stated in the pass their helped me!

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