Reviva uk

[Beans on Toast]

Still not had any reply aboout this yet!!!!

[ianmillington]

This is not targeted at Paul in any way, but this thread is a very convenient way to give you this news.

To update you on this, no doubt as a result of the momentum started by Andy and supported by R3 the DTI have not barred access but have have finally taken some action on this matter. They have circulated all IPs with a letter for us to send to our clients. The text reads:

“To whom it may concern

The Insolvency Service is aware that a number of people currently in an Individual Voluntary Arrangement (IVA) are being approached by organisations claiming that the IVA may have been mis-sold, and in some cases suggesting that they should cease making payments under the IVA.

IVAs are operated by licensed Insolvency Practitioners (IPs) who are subject to a rigorous regime of regulation. The professional standards required of IPs require them to explore all potential debt resolution options with you prior to organising an IVA. You should have received from your IP a booklet entitled “Is an IVA right for me?” and this should have given you useful information when making your decision as to whether to chose an IVA as the option for you.

If, despite the above, you consider that you may have been misled when choosing the correct resolution option, then the correct course of action for you to take would be to raise the matter with your IP in the first instance, using their complaints procedure. If this does not produce a satisfactory outcome from your point of view, you have the option of informing the IP’s licensing body who will decide on the appropriate action to take. Your IP will give you details of his licensing body on request or you can find this information on The Insolvency Service Website at http://www.insolvency-service.co.uk/newipsearch.htm

You should be aware that by entering into an IVA you take on certain obligations and breaching those obligations could have serious consequences for you. You should therefore always think carefully before deciding what action you should take.

The principal statutory alternative to an IVA is bankruptcy. Bankruptcy is a very serious matter as you will lose control of all your assets and will be subject to bankruptcy restrictions, in certain circumstances for up to 15 years. These include restrictions on your ability to obtain credit, and there may also be an impact on your employment. For these reasons bankruptcy should always be a last resort after all other options have been considered.
Consequently The Insolvency Service does not condone any implication that people in IVAs should stop paying and enter bankruptcy. If you have had any communication suggesting that you stop making payments under your IVA you should discuss this with the supervisor of the IVA and seek advice from professional, qualified advisers before taking any action.”

STEPHEN SPEED
Chief Executive of the Insolvency Service "

Progress indeed! I am in the process of making sure all my clients get a copy of this, and no doubt most of the other firms will too.

Ian

[Adam Davies]

Hi
Thanks for that Ian
Regards

[Loads]

Hello again

I'm really sorry to throw a spanner in the works here, but Ian to quote, you state that...... "Bankruptcy is a very serious matter as you will lose control of all your assets and will be subject to bankruptcy restrictions, in certain circumstances for up to 15 years" Can you actually tell me how many Bankrupts actually have a 15 year BRO, or even 10 years for that matter? If someone were to be subjected to a 15 year BRU/BRO they would have had to have committed quite an offence!! They are very rare indeed, and to use that as a put off for someone contemplating going BR is quite unfair!
Whether someone is in an IVA or about to go BR their credit rating is pretty stuffed anyway so surely it should come down to the right solution for the debtor and not for the advisor!!
I do know this industry and i do know that there is money to be made from vulnerable people who are just looking for the right way out, what i don’t like is someone being sold a solution that may not be appropriate to the debtor themselves!
If the right way forward is an IVA then it’s an IVA but if it’s a Bankruptcy then it’s a Bankruptcy, if the two are both an option, then the pros and cons of both should be advised to the debtor and then they themselves can evaluate and make their own decision. I’m sorry, I know that I’m new here and I honestly do not mean to offend anyone but there are two sides to every coin!

[Viki.W]

Hey Loads, Ian didn't say that, his post is quoting a letter from Stephen Speed, Chief Executive of the Insolvency Service.

[Loads]

Hi Viki, i stand corrected and my humble apologies to Ian.....its been a long day. lol

[Viki.W]

I seem to be having one of those long days too Loads, I wouldn't worry.[:)] Viki X

[ianmillington]

Not a problem loads!

I think there is a dual point here. What is at issue is firstly the access to the database. Nothing any of us can do anything about that. Secondly, having seen for myself a letter from one of the "Assisted Bankruptcy" Firms (Not Reviva I would add) there is a basic assumption put across that if the debtor does not own a property or is not in a profession that the IVA has been missold and the debtor is entitled to their money back.

Also, I have spoken to folk who have spoken to these people, and they claim that IPOs/IPAs, BROs/BRUs are very conveniently overlooked! Basically all upside for Bankruptcy, all downside for IVA.

The DTI is merely telling it like it is in the letter it has issued. It has to be rather technical in content and emphasise the downside of bankruptcy. The OFT are now doing likewise, although in a somewhat more consumer-oriented way. I for one am simply relieved that because of the action now being taken there is now at least a degree of openly demonstrated official support for the IVA process,

[Loads]

Hi Ian

I take your point however; there are countless stories about the mis selling of IVA's that need to be looked at in greater detail. For instance a man and his wife are in an IVA for a total of £30K, they have been in it for over a year, however the couple had £80k of equity in the home!! Why wasn’t they advised to re-mortgage?? Secondly they had not been told about the 4th year clause! When looked at in more detail, the total payments that were going to be paid to the IP over the period came to £41k which is £11,000 more than what they owed in the first place! Is that in itself not being mis sold??

Another couple who have 45k of debt, he owes 40k and she owes 5k, they were both sighed up for the IVA but the IP’s fees were £12,500 which if you half is more than what here her debt was!
Please don’t get the wrong idea here, i'm not advocating the likes of who you are aiming this at but i do feel that IP's themselves should be assessed more frequently, as this is the only way to stop cases like these happening.

[ianmillington]

I agree there will be instances of that happening, loads. However, the type of example you quote is not the type of case that is being targetted by the organisations referred to by the DTI letter. They are alleging mis-selling simply because the debtors do not own their own home, or don't have a job that will be prejudiced by bankruptcy, on minimal facts.

I would sincerely hope that a case of the type to which you refer would not ordinarily get past first base, particularly nowadays. . If it did make it to meeting stage, it could seriously expect a rough passage, probably rejection. However, that presupposes that the debtors can actually get a remortgage.Certainly if they landed on my desk the first option to investigate would be remortgage But what if they cannot get one, which is becoming more and more common nowadays? That effectively leaves sale of the property as the only means to pay the debts, unless they do an IVA. I assume you are not advocating that.

So far as IPs costs are concerned, the figures you are quoting indeed seem high in relation to the debt, especially assuming the debtors could, on day 1, remortgage to clear the debts. However, if they could not then it's worth bearing in mind that over a 5 year term the debts would double without the interest freeze imposed by the IVA, so the issues might not be quite so clear cut.

Ian

Ps - On the question of regulation I can tell you that as a profession we are subject to some of the most stringent regulation in the country - personally as IPs. That rightly reflects the fact that we have a statutory monopoly on this type of work (the OR excepted), every penny we handle is trust money, and we have the capacity to write cheques in favour of our own firms. You can rest assured that the licensing bodies take very seriously mis-selling allegations (or any other complaints for that matter)to protect the integrity of the self-regulation system. In addition, when the licensing body investigates a complaint any IP who does not take it seriously will very quickly lose his or her license.

Ian

[Loads]

Thank you again Ian for you quick response.

Fist of all i am not advocating a debtor to sell their home, i know only to well the fear of losing your home and its not a nice prospect.

The two cases that i mentioned above are in fact actual cases and both are being dealt with accordingly.

As in any business it only takes a few bad apples to give the decent ones a bad name, and i know some extremely good IP's that do not deserve to be put into the same category as the bad ones, I have no doubt you are one of the latter’s.

I feel that we are singing from the same hymn sheet Ian so that’s ok.

[Reviva UK]

hi

a few apologies firstly

Beans on Toast - I actually did reply the week following your first post but for some reason the post didn't get to the web. ( I am not a tech guy)

Answer: Reviva UK had decided some weeks ago to no longer send direct mail to people in IVA's. Unfortunatlely we made a mistake and while the company stopped the process it took some time for the mail fulfilment company to stop at their end.

In essence 75 letters were sent out after we had agreed to cease the practice.


I still struggle with some of this issue regarding some people in IVA's that are struggling.

There are great IP's ( and we have 2 on this site - Melanie + Ian ) and there are other companies that because of their size must surely struggle with quality management.

We have seen some horror stories here on IVA.co.uk about people being in unrealistic IVA's which have little or no chance of successfully completing the term.

Companies that put the client first ( the creditor and the debtor (( I hate that term!!)) are surely much more likely to have a successfuly completed IVA that those proposals that have missed some basic expenditure / mortgage rate increase etc.

It seems to me that there are 4 reasons why an IVA fails;

1. Change of circumstance - UNFORSEEN ( job loss , illness, relationship break up etc etc )

2. Change of circumstance - FORSEEN ( fixed rate mortgage ending, temporary job contract etc )

3. The debtor may get weary of the IVA and the time period to become debt free

4. An unrealistic Income & Expenditure making the survival of a 5 year IVA extremely difficult.


The two failure types that I am concerned with are the unrealistic I&E and the Forseen Circumstance change that should have been picked up by the candidate and IP prior to proposal.


In these 2 cases ((where the debtor (still hate the term) has tried to do the right thing but is now about to fail)) how does that person get help? The immediate response should always be to speak to the IP because they are in the best position to give clear advice.

The problem I have is that in many cases that I see - and borne out by experience here on the forum - it is almost impossible to speak to the IP without going round the houses and at the most vunerable time when people really need help they then get chased by the company in the same way that the creditors did prior to IVA.

Secondly one has to ask the question why was advice given in the first place that doesn't stand scruitny?

People in these positions have no energy left to make formal complaints with governing bodies and would not be entitled to compensation as it would no doubt be classed as a windfall.

This is why it is just SO IMPORTANT TO GET THE RIGHT IP WORKING WITH YOU - THIS RELATIONSHIP WILL LAST FOR 5 YEARS !! I often wonder why people ask for advice about which IP to choose when there are 2 excellent and well respected folks here on the forum. It is not worth the risk to look elsewhere.

Lastly after my ramble I would be pleased to hear from people about how best one should reach out and offer help to people who are struggling. People need to be able to get advice freely ( and ideally pointed to this forum) but how do you do that ?

I don't for one minute think that IVA's have been missold intentionally by IP's but there are clearly cases where perhaps not all the information was fully examined prior to proposal and this is usually due to the staff not IP involved.

Thanks

[Adam Davies]

Hi
I think IVAs may have been mis sold in the past,by certain companies,but not at the level claimed by some
We now need to ensure that the right solution is offered to the person in debt in the very first instance,DMP,IVA or Bankruptcy.
Regards