www.iva.co.uk

Hi, has anyone here successfully challenged an IVA extension by this firm or had a complaint against malpractice upheld?

I am currently contemplating court action following two main issues with Debt Free Direct:

ONE) When I first took out the IVA, I was very clearly told that the term would be no more than 60 months and had the potential to end in Year 4 if suitable equity could be released early.
The period stated in the proposal is '1 - 60 months' - the very clear implication being that 60 months is the maximum term of the proposal and the hyphun suggesting that an earlier term is possible.
This was in keeping with the advice I received from DFD throughout the time I was considering an IVA.
Another (typically buried!)section stated that if I was unable to obtain a remortgage in Year 4, my Supervisor will extend the IVA by up to 12 months. This implied (and seemed to support the DFD advice at the time) that any such extension would take me to Year 5 (ie. the maximum of 60 months stated in the contract).
It now appears I was misled.

TWO) Aware of my obligation to take all reasonable steps necessary to secure a remortgage I attempted a remortgage with two lenders back in August of this year. Unable to do so, I contacted Debt Free Direct for advice on where I might obtain a remortgage and spoke with one of their advisors, who told me that, in order to fulfil my obligations, I did not have to explore remortgages any further because Debt Free Direct would be getting one of their preferred mortgage partners (a firm called Select) to contact me sometime over the coming months.
I patiently waited for their approach and on DFD advice, made no further remortgage attempts.
I now find myself with a letter informing me of a 12-month extension after no such approach!

It strikes me as incredible that these firms can appoint their own supervisors when there is clearly a conflict of interest because Debt Free Direct will financially benefit from any IVA extension.

So I am now in a position where I was prevented from making further attempts to seek a remortgage and am now facing a 12-month extension I was not aware of owing to blatant mis-selling and an ambiguous contract.

As an unlawful extension will cost me around £6k, I fully intend to challenge this.

I have already tried to contact the supervisor but have had a response from a DFD advisor (and not the supervisor) and not surprisingly my issues have not been adequately addressed.

I have made one further effort to contact the supervisor and failing that I will be looking into further redress.

So I would love to hear from anyone who has successfully challenged Debt Free Direct.

I would also be grateful if anyone entering into an IVA with this firm has received similar assurances of 'no more than 5 years'.

Thanks

Hello and welcome. I am afraid the issues you have experienced are common to the vast majority of IVA's and are not down to mis-selling as such. However, you are, of course, free to challenge this.

The 12 month extension is well explained in the paperwork you signed. Whilst waiting for Select to contact you you were not barred from seeking further funding yourself. It is YOUR IVA, not that of DFD, who are merely supervisors.

In reality, the 12 month extension will work out far cheaper, in monetary terms, than a remortgage or secured lending.

I do not read your mis-understood clauses in the same way as you do, with implied limitations to the term.

A legal challenge will, most likely fail and will cost you far, far more than the 12 month extension.

IVA's are sold over the phone like they are a deal - 60 months and it's all over. Definatly worth reading the small print. Mine took 71 months (instead of 60) and I moaned and groaned at the time to everyone who would listen, but having completed it - I know I would not be debt free today had I not gone into an IVA. 12 months is cheaper then the original amount plus interest. I know you must be at the end of yout tether though. They are far from easy.

Dear Crusadorfox,
Please contact me via the email address in my profile so I can take a look into your case and address your concerns.
Speak soon.
Thanks,
Evette Everest

Thanks for the advice folks.
It is infuriating to see that most IVAs are five years and yet I appear to have been duped into six.
I will let you know how my challenge progresses.

I'm afraid I do not read the extension as you do and I have to agree with Foggy in that any legal challenge would probably fail.

You state most IVA's are 5 years, which is probably correct. However, most IVA's where there is property involved, will normally have the potential to run into 6 years. As do IVA's that involved NRAM - who notoriously asked for an additional year.

Hopefully Evette has been able to help you.

hi my IVA was taken out for 5 years but having equity in the house that i could not release i have to pay for a 6th year, this was written into my IVA, and i would rather pay an extra year than have a mortgage that i couldnt afford and put me into more debt.
Alot of people i know have had to extend there IVA to 6 years to cover the mortgage claus

Ours was 6 years from the start thanks to NRAM. So if we had had any equity it could've run to 7 years.

12 months of additional payments = debt freedom.

Releasing equity via a secure loan = years more of owing money.

Refusing to pay it may cause your iva to fail and may lead to creditors filing for bankruptcy

In my opinion its a no brainer ..... 12 months of additional payments !