The decision to enter an IVA is a very personal one and depends very much on your financial circumstances. There are plenty of highly competent people ready and able to assist you with your debt problems. In the UK, these include debt charities, licensed Insolvency Practitioners, and government-backed financial guidance from MoneyHelper.
Beware of online debt advice. It is unregulated and could be misinformed. Worse still, you run the risk of running into an IVA scam. Unscrupulous people trawl the internet for victims, often targeting those desperate to resolve a problem. When you go online with your debt problems, you could attract the attention of one of these people.
In this article, we’ll discuss IVAs and look at why people seek debt solutions online. We’ll also discuss the dangers of online debt advice and guide where to find safe debt counselling.
What Is an IVA?
An Individual Voluntary Arrangement is a legal agreement designed to help you when you can no longer keep up with your debt repayments. To enter an IVA, you must be able to make regular, affordable monthly debt repayments. This is one of the reasons why an IVA isn’t a suitable debt solution for all.
An IVA is a formal agreement between you and your creditors that allows you to repay your unsecured debts over a typical period of five or six years. Once the IVA is approved by your creditors, interest and charges are usually frozen, it stops creditor pressure, and gives you a clear plan for a debt-free future. It’s legally binding and must be set up and supervised by a licensed Insolvency Practitioner.
Why People Seek IVA Advice Online
People often turn to the internet for advice on IVAs as they feel safely anonymous. They may feel less alone with so many other people in the same predicament. Here, you can ask questions on forums without revealing your name. This may feel safer than a face-to-face discussion with a debt counsellor or financial advisor.
People who have been battling debt problems often feel scared and alone. Many are also ashamed of the situation, and there is comfort in knowing that others are feeling the same and going through the same experiences. People, mistakenly believe that they can communicate openly online and that others will help them to find a suitable solution to their debt problems or provide answers to their IVA problems.
Why Online Facebook Groups and Forums are Unreliable
It is a mistake to believe that you will find credible debt or IVA advice in online Facebook groups or forums. These are the reasons you can’t trust this advice:
• The advice may come from an unregulated source
• The person offering the advice probably lacks training
• The advice you receive may be biased
• You leave yourself open to scams
When you ask for online debt advice, you leave yourself open to intentional and unintentional misinformation that could leave you in a worse financial position than the one in which you currently find yourself. Let’s examine this in more detail.
Unregulated Sources
The Financial Conduct Authority (FCA) regulates all UK-licensed financial advisors. If you seek advice from a licensed financial advisor, you know that the person is trained to give you advice. You can complain to the FCA if you receive incorrect or harmful advice from an FCA-regulated debt adviser. There is no such recourse if you receive detrimental online advice, because online sources are usually unregulated.
Unqualified Guidance
A person who has themselves been through an IVA is not qualified to advise you on what to do. Everybody’s financial situation is different, so you need specialised debt advice that takes your unique circumstances into account. An IVA is a legal commitment with serious and long-term consequences. You must fully understand these before you commit.
Prejudiced Advice
Social media platforms are full of adverts pushing insolvency options. You may encounter companies online that are in the IVA business and will try to convince you that you need to apply for an IVA when you could follow another debt solution that is better suited to your current financial circumstances. It isn’t easy to distinguish genuine debt counselling businesses from fly-by-nights, or to identify whether they are qualified to give the advice they are promoting.
Online Scams
You run the risk of scams online. The internet is full of crooks waiting to convince people to part with their money. They will likely offer to write off debt for a sum of money. Paying the scammer to write off debt will leave you in a worse position than you were before.
Scammers are known to target people who already have IVAs. They usually attract the attention of people who have financial problems by offering to provide financial assistance or to write off debt.
The Risks of Relying on Online IVA Advice
Facebook groups and forums may help to alleviate some of the emotional strain of looking for a debt solution, but relying on them for advice and guidance has some real risks. The people offering advice may not intend to put you at risk, but they don’t have the training to assist. They are also not regulated, so you can’t hold them accountable if you’re unhappy with the outcomes.
An IVA is a legally binding agreement that will have long-term effects on your financial situation. If you decide to go this route, you must understand the implications and the alternative debt solutions that may be better suited to your circumstances. You face the following dangers when taking IVA advice online.
Outdated or Incorrect Information
IVA rules and practices evolve and change with time. Information posted on social media may become outdated. It may no longer be relevant. Equally, actions that worked well for someone else might not work as well for you.
Personal Experiences Offered as Fact
We all have a different set of financial circumstances. These comprise income, assets, debt, and expenses that determine whether an IVA will work for you and what your monthly debt repayments will be. Every financial situation is unique. People tend to simplify these matters online and assume that what worked for them will work for you.
Bad Payment Advice
There’s always someone willing to offer bad advice, suggesting that you stop paying creditors or ignore the advice of your IP. They may even provide shortcuts to speed up the IVA process. This advice is dangerous. If you stop paying, you could face extra charges or legal action. Your IVA application could fail or lead to a breach of contract.
Hidden Commercial Motives
As many people have found to their detriment, the internet can be a dangerous place, where businesses trawl for clients. The commercial motive may not be evident, but referral links could steer you to a paid online debt service. These services may exaggerate their success or give biased advice to encourage you to sign up. These posts may look like genuine personal recommendations, making them easy to trust.
Scare Tactics and Misinformation
The internet is full of myths and misinformation. People on the forum may tell you things like, you’ll lose everything in IVA, that your creditors will send bailiffs immediately, or that your IVA could be cancelled in a flash. These claims may convince you to make a rushed decision rather than getting debt advice from a qualified financial advisor.
Privacy and Security
You never know who is reading your posts when you share personal details, like your debt problems, online. Scammers can, and do, use these posts to target people.
Where to Seek Debt Advice
Debt is stressful, especially if it is silently accumulating thanks to interest and charges, so it may be difficult to think straight and plan your way out of the predicament. Perhaps an IVA is the best route for you, but you need to have examined all of your debt options under the guidance of someone trained in debt counselling. The safest advice comes from regulated professionals and reputable organisations.
An IVA is a very personal, tailored agreement that takes account of your income, debts, assets, and all your necessary expenses. Trusted and regulated organisations include:
• Licensed Insolvency Practitioners
• Reputable Debt Charities
• FCA-Regulated Debt Counsellors
• The Insolvency Service (official government information and oversight)
Licensed Insolvency Practitioners
If you decide to go the IVA route, you’ll need a licensed Insolvency Practitioner. The information you receive from an IP is, therefore, reliable. IPs are trained and regulated. An IP can explain available debt solutions and discuss whether an IVA is the best solution for you. They will evaluate your income and expenditure to assess what you can afford in debt repayments. Having calculated a reasonable monthly payment, they will prepare an IVA proposal and negotiate a deal with your creditors.
Get Reliable IVA Advice Today
If you want clear answers from qualified professionals rather than online guesswork, My Debt Plan is here to help. Start with a quick, confidential chat about your options. Contact us on 0161 464 0870 to speak to one of our friendly advisors about any of your debt queries.
