Consumers who are looking to find out about IVAs or other solutions for their debt problems are sometimes scared or concerned about enquiring about financial advice. Alot of people may feel ignorant in terms of their understanding of financial matters and be reluctant to talk about their financial problems to strangers, even though they may be professionals.
This is of course is understandable when you consider the whole overabundance of financial terms such as equity, dividends, insolvency, creditors and debtors, bankruptcy, trustee etc. etc. These terms may be simple for accountants, bankers and finance professionals to understand but for most ordinary people. If anything they may simply enhance their fears. Some people will also be embarrassed by having to admit that they are in financial difficulty. It is therefore no wonder that some people would prefer to just bury their heads in the sand rather than address their financial problems.
People in financial difficulties may be surprised to hear that there are many reputable insolvency firms and individual insolvency practitioners out there who provide debt advice and who do not charge any upfront fees. It must be noted however, not all service providers behave in this way. It is important to clarify at the beginning what exactly will be free and what will not.
This should be found out at the very beginning before you continue into any agreements. If you do not understand the process you can walk away and seek advice from another service provider until you are satisfied and happy with the advice you are getting and understand everything involved in the process. You can research these firms online and you can compare them on websites which rate the service providers and have reviews from previous customers. You can also make initial enquiries by just calling them up from your home and remain totally anonymous. You can then use the information you received to decide your next step from the comfort of your home and avoid any potential embarrassment you may be concerned about regarding your lack of knowledge about financial or debt matters.
A reputable IVA provider will fully examine a debtor’s circumstances and investigate all options for a financial solution including an IVA, bankruptcy, debt management or possibly debt consolidation and will advise the debtor accordingly. At this stage no fees should be charged. If the debtor decides to proceed with an IVA the nominee will carry out the preparatory work for no charge. If the IVA proposal is rejected at the meeting of creditors, then the debtor has nothing to pay and the reputable insolvency firm will receive no fees.
If however the IVA is approved, the debtor begins to make the agreed contributions, often on a monthly basis. The supervisor lodges these funds into a bank account on behalf of the debtor and it is from this account that dividends are paid to the creditors and the insolvency practitioner can begin to recover fees for work done in relation to the IVA. These fees are clearly spelt out in the IVA proposal and already agreed by the creditors. This means that the only payment made into an IVA is the monthly payment and this covers everything.
In an Individual Voluntary Arrangement people will repay their creditors on a monthly basis for the period which can be up to five years. As there is little or no social stigma attached to an IVA, no one even needs to know that you are in an IVA, unlike in bankruptcy where there is a much greater level of publication regarding people who have become bankrupt. IVA service providers do not charge any upfront fees and If the IVA provider you are dealing with asks for upfront fees, walk away from them and look for a better service provider. You should pay nothing until after your IVA is approved and your repayments amount is agreed along with the fees and costs of the IVA.