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How to complain about an IVA

positive-complaintIndividual Voluntary Arrangements are complicated long-term legal agreements. A lot can change in your life during the 5,6 or 7 year term your IVA lasts.

Sometimes your IVA firm isn’t as helpful or sympathetic as you think it should be. You should always be treated politely and have things explained to you.

If there is something really wrong with the way your IVA is being handled, then you can and should make a formal written complaint.

Complaining has a bad image these days: it’s seen as weak, better to have a positive attitude and “get on with your life”. But in some situations making a complaint is absolutely your best option.

I need to point out the obvious – I don’t know what your problem is and I don’t know the terms of your IVA. I am also not a lawyer!

Some of this article may not be relevant for you and there may be other avenues that you can explore. You may sensibly decide you need help to lodge a complaint  – see the bottom of this article.

Let’s look at a couple of common reasons people give for not wanting to complain.

“Complaining won’t make a difference”

Lots of people go into an IVA because they are scared about their debts, CCJs, bailiffs etc. Perhaps you feel your IVA firm are the experts, you know nothing and have to put up with whatever you are told. But you have more power than you realise:

  • an IVA is a legal contract where the exact terms matter;
  • your Insolvency Practitioner (IP) is personally liable – if you decide to go to court (NB this is very rare and I am not suggesting that you should!) then you don’t sue the company that organised the IVA but your IP;
  • your IP can potentially lose their license from the body that authorises them, which means losing their job. Again this is very rare, but the point is that an IP has to act professionally. They can’t just tell you what to do if it’s not in accordance with the terms of your IVA;
  • handling complaints can also be a difficult and time-consuming problem for the IP and the firm to deal with. They will want them sorted out as soon as possible.

“My IP will make me bankrupt if I complain”

Your IP may feel that answering your complaint is a nuisance, but this is not a valid reason to make you bankrupt. The Insolvency Act 1986 says the court will only approve an IP’s petition to make someone bankrupt if they haven’t complied with their obligations in the IVA, they have supplied misleading information (this doesn’t mean a minor error or omission) or they haven’t complied with a reasonable request by the IP.

If at any point someone from your IVA firm says they will make you bankrupt if you don’t do X, you should ask them to explain in writing the clauses of your IVA you will be in breach of by not doing X.

Step one – get a reality check

You need to know that your complaint is actually reasonable. Things go wrong with IVAs and if something large has changed in your life it may be there is no chance of the IVA being completed.

This is especially likely if it has happened early in the IVA. Later when you have made a lot of payments already, there are usually more options. Read my article on What happens if you can’t afford the IVA payments, and see if that suggests potential ways to solve your problem.

Essentially a complaint has to be about the way your IP has handled the situation, not about the situation itself.

If any IP is likely to have done the same thing, it is unlikely a complaint will achieve anything.

I suggest you post about your problem on one of the IVA forums,e.g. iva.co.uk or MoneySavingExpert. That will give you some feedback on whether you do have good grounds for complaining. You may also find that in replying to you, people write phrases that you can use in your complaint and give useful links. Posting can be done anonymously but do name the IVA firm, because people may say if previous posters have had similar problems.

On the forums you may get asked questions such as “is there a minimum dividend clause in your IVA?” or “what does it say about taking a payment break?”  Look at your IVA paperwork:

  • the IVA document and any annexes are the key items. If any of these are missing, ask your IP to send you a copy;
  • any correspondence between you and the IP before the IP was proposed or during it.

It may seem confusing at first, but persevere and ask questions on the forum. The more you understand about your IVA, the better your complaint is going to be.

Step two – simply ask why

Before you lodge a formal complaint (step four below) it is a good idea to write to your IP stating your concern.  Even the best firm sometimes makes administration errors or there may have been a misunderstanding.

Don’t delay doing this by trying to write the perfect email – keep it short and use plain English rather than legal wording:

  • don’t use the word “complaint” at this stage
  • ask the firm to explain why you are being asked to do X, you don’t think you should have to because of Y
  • if you would like a payment break or to propose a full and final settlement but your IP says you can’t, ask them to explain why
  • say if you would like to speak directly to your IP or have a meeting with them.

Step three – background research

Whilst you are waiting for the reply, do some research on your IP and the company as this may help you with the next step:

  • look up who authorises your IP;
  • read SIP 3.1 – this is a Statement of Insolvency Practice for IVAs. This link is to the one issued by the ICEAW; the other bodies that authorise IPs have identical ones;
  • read the Code of Ethics that your IP’s regulator publishes; here is ICEAW’s, where Section A and D are most likely to be of interest;
  • find out who regulates your IVA firm. If they do other debt management work apart from IVAs, they should be FCA regulated and their website should say this;
  • if you would like to know some factual information that could affect your complaint, consider putting in a Subject Access Request to your IVA firm. See https://ico.org.uk/your-data-matters/your-right-of-access/ which explains how to do this. Do this as a separate email to the Step Two query and add a sentence on the end making it clear that this SAR is in addition to the query you sent them on dd/mm/yy.

This is all background information, you can skim read it just keeping your eye open for things which seem relevant to your situation.

Step four – make a formal complaint to the IP

Your IVA firm’s website should have the details for how to make this formal complaint.

Don’t by-pass this step even if you know you have a serious problem (one exception – if your IP informs you he is about to petition for your bankruptcy, you need professional help right away, see below). Your instinct may be to “bring in an outsider” to solve your problem, but going through this formal internal complaint has the following advantages:

  • if it works it will be quicker;
  • it provides a way to reach a settlement without attacking your IP’s professional competence. If you complain to the IP’s regulator, it is less easy for them to back down because they may feel they have to defend their actions
  • it may give you more useful information if you do need to take your complaint further.

Try to separate out the major issue from any subsidiary ones.

For example, if your main complaint was that your IP is telling you your IVA is going to fail when you think it could reasonably be marked as completed, you may have subsidiary complaints such as that you were initially misled about what an IVA involved, the IP’s staff don’t return phone messages, or that you have been unable to speak to the IP yourself – list these other points after explaining the most important problem so that you don’t confuse it.

If you know what you want to happen, ask for this clearly, for example, “I would like you to confirm that I do not need to do X as it is not mentioned in my IVA terms.”

Step five – make an external complaint

Remember, just because this seems complicated doesn’t mean that your complaint is going to fail!

Which one or more of the next four types of action you take is going to depend on your specific case, so here I’m going to outline them briefly. Think about getting professional help to choose between these and to take them forward, see below.

(5A) complain through the Insolvency Service

You are not complaining about your IVA firm, you are complaining about your IP.

Complaints about an IP have to go to their authorising body, but the Insolvency Service has provided Insolvency Practitioner Complaint Form for you to use.

The Insolvency Service says:

The authorising bodies are not able to intervene directly in any insolvency case, nor to overturn the decision of an insolvency practitioner, nor that of any Court. They will consider any referral within the context of whether the actions or behaviour of the insolvency practitioner may result in the insolvency practitioner being liable to disciplinary action.

That may mean that you can’t see the point of making this complaint! However there may be conciliation mechanisms that will help to resolve your dispute, even if the regulator lacks the legal power to force an IP to change a decision. This is worth doing even if you are sceptical. 

(5B) court action

To overturn an IP’s decision you can go to court. If you are being told to do something that seems to be against the terms of your IVA agreement, or which is not mentioned in your IVA agreement, then this may be the best option for you.

You need a lawyer to discuss how to pursue this. This would be a civil matter usually dealt with by a County Court so don’t contact the police involved.

(5C) complain to the Financial Ombudsman about mis-selling

The Financial Ombudsman has no jurisdiction over the operation of IVAs. The FO will have jurisdiction over the debt advice process before your IVA was agreed, so if you think you were ‘mis-sold’ an IVA and your IVA firm is regulated by the FCA, then complain to the FO about this.

You may also be able to complain to the FCA if you think you should never have been advised to start an IVA and the firm you originally spoke to about an IVA that passed your details to your IVA firm is FCA authorised. This would be separate from any complaint to your IVA firm.

There is also the problem that if your IVA is continuing, then any compensation ordered by the FO may even fall into your IVA under the windfall clause, although this may make it easier to get it agreed that your IVA has been completed.

(5D) complain to trade associations

Your background research may have turned up some possibilities here if it seems that the firm has breached any of the Codes of Conduct it has agreed to.  This is going to be a nuisance for the firm rather than doing you any good directly, but go for it if you think it applies to your case!

Get help

If you think you need help with all this, contact your local Citizens Advice Bureau.  All local Citizens Advices have access to the national specialist debt team, so don’t worry that the advisor you see hasn’t dealt with an IVA complaint before – it might be a good idea to show them this page!  They will want to see your IVA documents and they will be very pleased if you can give them the ‘background research’ from step three above.

You may need a lawyer. Some CAB’s have lawyers, others will be able to refer you to a local Law Centre or other places for pro bono (i.e. free) legal help.

If you can afford to pay (and most people in IVAs can’t!)  then you need to find a lawyer who has experience in this area – the lawyer who did your conveyancing, however competent, is unlikely to be able to help. Google for terms such as “insolvency dispute litigation IVA” and phone a few up to discuss your situation – ask about the likely cost and what you might hope to achieve.

More Debt Camel articles:
Is it good that there are few IVA complaints?

Is it good that there are few IVA complaints?

IVAs – complain about a secured loan

How does an IVA work and what goes wrong

How does an IVA work and what goes wrong

Author: Sara Williams Tagged With:

Comments

  1. Made my last iva payment march 2014 have yet to have my completion certificate who/what can i do or contact about this?

    Reply

  2. Hi I made my final iva payment last may 14. My debts were £23000. With all my payments and 3 ppi I have paid back about £21500. I have been enquiring about my completion certificate and have just had a letter yesterday asking for 12 more payments of 260 per month. Can they do this 10mths after my final payment. Also barclays sent me a letter saying they were giving me back £3500 in interest that shouldn’t have been taken and they sent a letter to dfd about this. No matter how many times I ask how much I owe no one will tell me. They also wont give me any information on the barclays interest.

    Reply

    • Hi Marlow, you could ask DFD in writing about the Barclays interest issue and whether this affects the maximum amount you might have to pay into your IVA. re the 10 months delay, that is very poor, you may well have made financial commitments if DFD told you that your IVA wouldn’t be extended. Again a written complaint (as described in this post) would be a good first step and I would suggest talking to your local Citizens Advice Bureau if you would like help with this.

      Reply

  3. Hi Sara we spoke a month or so ago , still not got my certificate, I rang today they told me that they r waiting for 1 bank that did not replay to them so is outstanding, Santander, if they don’t get in touch soon the money will divided between the over creditors or come back to me to pay Santander ,, or is not right

    Reply

    • Hi Harry, you need to ask your IVA firm what will happen if Santander don’t reply. But you are not going to be left with your IVA finished and still owing money to Santander if that’s what you are worried about. Your IVA finished in December. If you haven’t got your completion certificate by the end of the month, put in a formal complaint to you IVA firm and the Insolvency Service’s gateway for complaints.

      Reply

  4. Took out iva in 2009. First two annual reviews, payments were adjusted to cover, no problems. Original firm taken over by Money Plus. Next three annual reviews went in heard nothing. I could see myself that any extra earnings had balance out to my out going. Even on a tight budget I had nothing left each month. Final payment in Aug 2014. Heard nothing, so I thought it was over. Great. Then March 2015 got annual review pack. So I filled in sent off. Now they say I owe several 1000’s (waiting on final figures). Panicking now and don’t know what to do. Have they mishandled my iva? Or am I at fault for not chasing them?

    Reply

    • Hi Keith, if you completed the annual reviews and thought there wouldn’t be a change in payments because your expenses had also gone up, I can’t see why it was your job to chase the IVA firm if you didn’t hear anything! If I was you I wouldn’t wait to hear “the final figures”, I would email them saying why you don’t think your payments should have increased (detail your increased expenses). Add you will be putting in a formal complaint to them and also to the Insolvency Service Gateway if your completion certificate doesn’t arrive within the next month.

      Reply

  5. Hi not a negative comment I’m actually in shock and EXTREMLY pleased . We made our final payment to our iva on the 1/12/15 then received query regarding equity in our property which we dealt with quickly and today 12/1/16 we received our certificate of completion issued on the 6/1/16 !!!! Very happy as was worried as I had read lots regarding people waiting silly lengths of time to receive there completion certificate . Our iva was originally with grant Thornton then changed to aperture .

    Reply

      • Hi I was with Grant Thornton now named as Aperture, i made my last payment last month and they have now told me it will take up too 8 months to complete, which im shocked with, i suppose ill have to wait and see.

        Reply

  6. Hi,

    I’m 2 years into my IVA and was hoping to pay off any debt still owed, dependant on inheritance I may receive. I’m inquisitive on how I go about this as I don’t seem to be able to get an easy and straightforward answer.

    Any advice or help would be much appreciated

    Reply

    • Hi Mark,

      you may find this article useful: https://debtcamel.co.uk/iva-settlement/.

      Your IVA firm won’t be able to give you an exact amount needed to settle the IVA until it’s know when you will be able to pay this because a) until that point you will be making more monthly payments b) if your IVA has the “statutory interest” clause that amount goes up as time goes on and c) other windfalls (typically PPI) may reduce the amount you have to pay to settle.

      However if you ask for a rough estimate of what the amount would be likely to be if you paid in in, say, 6 months then they should be able to give you a figure and explain how the calculation works. If you don’t seem to be getting anywhere with your case handler, out in a formal written complaint to the firm and emphasise that you are only asking for an estimate and an explanation of the calculation.

      Reply

  7. Funnily enough I’ve just made a complaint to my IP, completed my IVA early in June 2013 after finding their staff rude and mistake made on several occasions with regards to overtime and income/expenditure sheets reverting to previous levels.
    Fast forward to now and once again an issue has arose, once again their member of staff was rude and once again it seemed like everything was too much trouble for them. As I am in the process of remortgaging it transpires that despite having over three years to do so they have never removed the restriction on my property. They weren’t apologetic, and advised me to put any complaint in writing. They have promised to submit a form to remove this interest but this is the final straw for me with them, having experienced issues on a couple of previous occasions. they have apologised and seem to feel that a mere apology is acceptable in the circumstances. From their emails its clear that their original form to remove their interest wasn’t sent by recorded delivery, to me it seems that this is incompetence which could have a massive effect on my life

    Reply

  9. hi i have just made my last payment after 6 years 8 months to IVA company now they are telling me it may take up too 8 months to close as they have to asses my last years earning which will take 8 weeks then a further 6 months to close down, is there a time limit they have to do this.

    Reply

  10. My iva isn’t registered on my credit file or the insolvency register and I’ve been on it over 18 months now. I’ve got a copy of chairmans report, creditors meeting etc

    Is this right ?

    Reply

    • No it’s not right. But it’s not to your advantage to have an IVA showing on the register or your credit record so I’m not sure I would bother to complain about it! I suggest keeping an eye on your credit record and if you see the IVA appear, make sure it has the right start date.

      Reply

  11. Hello

    I am some 10 Payments away from completing my 60 Month IVA – I have no assets or Mortage so I should get to the 60 Month and not be approached for an Extension – which I believe is correct. I have however just been offered to take an unsecured loan in order to end my IVA early – This I find so Hypocritical it is unbelievable – that an IVA company encourage you to get into Debt in order to pay off the IVA early and they Charge a £200 referral Fee in the process – Is this legal and can they actually do this?

    Reply

    • In this case the loan is being suggested by the IVA firm in order to make a full & final settlement offer to the IVA. I don’t think this is a good idea (for the reasons given in the link to my other article) but it’s not illegal.

      Reply

  13. Hi. I am 54 months into my Iva and at the equity release stage. I received a letter yesterday saying that there is over 5k equity and I am unable to remortgage,thus I have to continue for extended 12 months. So I rang my IP and asked for them to explain there findings.
    Firstly I feel they have overpriced my property and they said that I am welcome to get my own valuation done by (pretending) to sell my home to a local estate agent. Which I thought was very unprofessional.
    Secondly when I was given the findings their stated that there was 8k of equity in the property,so I asked if that was 8k each for me and my wife as we are in a interlocking iva. The response I got was that I’m in a joint iva and there only needs to be 1 x over 5k to remortgage.
    I’ve done some research and dissected my Iva proposal and I believe that due to the wording of my proposal that we would need 5k each of equity.
    Can I challenge this second point with my IP.
    Thanks

    Reply

    • First get that valuation. Bother unprofessional, this could be a simple way to resolve your situation. You need to ask the estate agent for a realistic but not fire-sale price, say you want the house sold within a few months.

      You could look back at the documents you got when your IVA was set up. They may have contained some worked examples which will clarify the point. For most joint IVAs the de minimis 5k applies for each of you but it will depend on the wording of yours.

      You can definitely challenge this – put in a formal written complaint to your IVA explaining why you consider they are wrong. You may want to get some help to draft this – your local Citizens Advice or a Law Centre could help.

      Reply

    • Thanks Sarah. I’ve got a estate agent coming to do a valuation on Wednesday. so hopefully could have this resolved soon.
      I’ve looked at similar properties in the area and they seem to be in better condition than mine and cheaper than their valuation And I’m sure that my house won’t match there valuation.

      Thanks again

      Reply

  14. Hi, I’m coming to the end of my 54 month. I have been advised my equity release is £9000, I cannot get a remortgage as it is shared ownership social housing. I requested how much was left to pay as I’ve paid 2 lots of ppi totalling £14000 on the original debt £31,000. They could not give me a breakdown but said I owe £9000 which included fees and interest. I get regular credit reports and the figures don’t stack up – my understanding is that they are not to make a profit – can I challenge this as they have i need to make 12 extra payments.

    Reply

    • First, do you agree with their calculations on how much equity there is in your property? You should be left with at least 15% equity. See https://debtcamel.co.uk/iva-equity-release/

      Two lots of PPI totally 14k sounds like a lot, but the claims company they used will have been expensive and their fees have to be deducted. So it may not make as much impact on how much has been paid in as you think. But you are entitled to ask for breakdown showing how much has been paid in to date and what the fees have been.

      Reply

  15. Hi
    My experience is goal post changes all the time and fees need to be checked as to what you are paying for ask for a break down of what your paying and also ask for a list of if creditors and go back to them and ask for balances and proof letter from them and I know it’s hard but try work out what you have paid and include ppi and original variation and if it don’t add up go to them with a complaint and your proof and ask for investigation. And don’t give up! Until you get the answers chances are balances are a lot less than what you think if they are old debts some might of even been written off you are entitled to know what you are paying for as you employed them good luck

    Reply

  16. i completed my iva in june 2017 with debt free direct and i havnt received any feedback as when i will receice my completion certificate in fact dfd wont even answer the phones

    Reply

    • DFD’s parent company has gone into administration. The DFD subsidiary is being sold to Aperture. I suggest you start sending emails rather than phoning.

      Reply

    • Hi get an email address write one email and overload them everyday until they respond also you can go through fairpoint as they own DFD with a complaint about completion I just bombarded them all day everyday until they listened to me ! Goodluck I can’t see how they are going into administration as there turnover last year was somthing like 5.2 million check out fairpoint and I’m sure you will see your insolvency practitioner on there website as a director or manager there

      Reply

  17. I completed my iva in May 2017 I waited 5 months for the final closure document to come threw but it eventually did,, previously in October 2016 I got a letter from bank saying I had ppi to come back to me so I informed the iva company about this and left it at that. Then in March I got another letter from bank saying you haven’t yet claimed your ppi so again I phoned the iva up and the said the have collected all my ppi’s so again I left it at that because I was coming to the end of my iva. I then was given the option of remortgaging to further pay my debt which I took out so then in May I stopped paying my iva and started paying into a different repayment scheme. When I did get my final enclosure document I started applying for ppi as I hadn’t previously in many years. Then I got a response from the same ppi that sent me a letter in 2016 that my iva company had not contacted them and the money was still with them. So I sent them the final document and behold the iva company who i finished with in May took all the money. Is this right can they do this even if I am out of the iva and paying a different company for the existing debt that the creditors agreed on

    Reply

  18. I would just like to add that IVA is the worst government financial scene ever! I have all written documentation and proof – I owed £25,800 and in all I paid back £40,989!!!!!! This is the biggest con ever – if people read this my advice is go bankrupt and don’t pay anything back!!!
    No one will help you, no one cares and banks and financial people do not give a shit about anything or anyone accept how much they can get out of you.
    Waiting for the day when soneone takes these IVA companies to court and they are told they must pay back the money they stole from people!!!!

    Reply

    • The large majority of people don’t have to make any payments if they go bankrupt. However in your case you probably would have been one of the those who have to make monthly payments for 3 years in bankruptcy, and you would not have been able to keep any PPI refunds for example. So although you probably would have paid less than in an IVA, and it would all have been over a lot more quickly – you would not have paid nothing in bankruptcy.

      Reply

    • Thank you – I knew I had been mis-sold it but there is nothing to do about it – I had no one to talk to for help regarding it. I messed up and it has subsequently messed my life up also. No home, no where to live, no job either, no savings, nothing. People should be warned off these companies who promise the world and deliver hell. There is no way I can get anything back now either. I have tried with banks concerning PPI and they say they have no information on me? When it comes to money and life in general I am the unlucky one!!!

      Reply

  19. I took out an Iva when I was made redundant in 2008 and none of my creditors would agree to smaller payments. I made my last payment in July 2013 – but have never received a completion certificate. Debt free direct wouldn’t send it until I signed a form entitling then to claim my ppi – then it was made legal for them to just get it anyway, they were sent a payment of over £6000 which along with all my payments should have repaid my creditors in its entirety. Still no certificate of completion – now I’ve just been given another ppi refund – which has gone directly to a firm called Aperture – is there anything i can do? I feel like DFD have been very sly and surely something must be illegal – no certificate of completion when it’s paid up for nearly 5 years – and now being able to make a claim on my other refunds – how is this fair??!!

    Reply

    • I am sorry but DFD were perfectly within their rights to refuse to give you a completion certificate until you agreed to them collecting PPI afterwards.

      When you agreed to your IVA, assets that you had (apart from excluded ones) became the property of your creditors. These assets included the right to make PPI claims.

      It is a pity you didn’t take advice at the time and just sign and get your completion certificate. I am sure Aperture will send you it now if you sign.

      Reply

  20. I have iva for just over a year. My circumstance changed and I am earning less. I have infirmed them and received no response. All chasing. Considering to stop payment and go bancrupt.

    Reply

    • Hi Alicia,

      that may be the right way forward for you but it is a big decision. Do you have a house with equity? Any assets? How large are the debts in your IVA? do you think your earnings may improve?

      Reply

    • My response is after being talked into an IVA by the now defunct Debt Free Direct, is go bankrupt. You’ve only wasted 1 year with them – don’t waste another 5 paying it off – go bankrupt and do t pay anyone – your still young – no stigma with bankruptcy the best people have done it. Forget IVAs they are the biggest government rip off and money making scam since PPI

      Reply

  21. I took out a joint Iva almost 6 year a go my ex has paid nothing towards it for 5 year or our mortgage , I am now married and trying to put my husband on my mortgage and take my ex off I rand my Iva and they agreed and sent my a letter through email confirming this my mortgage company asked for a letter not the email so Iv rang back and are now saying my ex can’t be took off till the Iva is complete and I’ll need to remortgage with my ex to release the equity in my house! They just be mad if they think I’m going to do that surly that’s wrong I don’t mind remortgaging if my husband is on as we live in the property but why would I remortgage with my ex who doesn’t pay towards nothing and also the fact they have sent me the wrong information in the first place it’s shocking Iv gone through 3 months of stress trying to add my husband finally get it sorted for them to say aww sorry you when told the wrong information!

    Reply

    • First of all, there is no such thing as a “joint IVA”. There are two separate IVAs. Have you been paying your ex’s IVA all these years without knowing this?

      Second how long was your IVA for – if it was for the usual 5 years, you should already have passed the “remortgage or pay an extra year” point?

      Who is your IVA firm?

      Reply

  22. Are these iva’s a con i think there worse then ppi i got back 15000 and it went in into the iva so i will be paying the same that i owe

    Reply

  23. My iva has failed i was paying £262 a month and i called them to say i cant afford that much but they wouldnt drop it so it failed ,i payed in £4730 and out of that only £700 went to my debts and the rest my iva (unity) took ,lm still in debt and ballifs knock the door any suggestions ?

    Reply

    • Sorry for all the questions:
      When did your IVA fail?
      What did you want it reduced to? Was this put to a vote of your creditors?
      How much are your current debts?
      Are you renting or do you have a house with equity?

      Reply

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