Misleading DMP advice Mrs B was advised to go into a Debt Management Plan (DMP) by an IVA firm. They referred her to a firm that charges fees for running a DMP. I suggested that she should talk to StepChange or another provider that doesn't charge any fees for a DMP. Mrs B went back and queried the advice with the IVA firm. This is the WhatsApp conversation: I explained to Mrs B that … [Read more...]
Insolvency News & Policy articles
Here are all the Debt Camel articles about what is new and changing in bankruptcy, DROs and IVAs. They cover everything from news about IVA firms to statistics and regulatory changes from the Insolvency Service. These articles are mainly of interest to debt specialists.
If you want practical advice on choosing between the different insolvency options, or about what happens when you have gone bankrupt or are in a DRO or IVA look at the following:
The new DRO hubs – what happened in 2023
In January the Insolvency Service published data showing how the volumes of Debt Relief Orders (DROs) done by advice agencies changed in 2023, see Monthly IS statistics Jan-Dec 23, Table 3.2. In February 2023, the two new MaPS-funded DRO hubs began operating. These are run by Citizens Advice and Money Wellness (called Benesse Advice in the IS statistics, also known to debt advisers as Gregory … [Read more...]
IVA mis-selling must stop – FCA finally acts to ban debt packagers
Many people have been mis-sold IVAs when they had a better (cheaper, quicker, less risky) debt option available. These other options were ignored or not properly described by some firms that should have given proper debt advice. IVAs are the only debt solution in England, Wales and Northern Ireland that generates large fees for the firms setting them up. These fees can distort debt advice given … [Read more...]
The new DRO hubs start in February – how will they work?
MaPS announced in November that it had signed contracts for debt services that will be effective from 1 February 2023. The two contracts for Debt Relief Order (DRO) hubs have been awarded to: Citizens Advice; and Gregory Pennington. There is a lot of uncertainty in the debt advice community about how these new DRO hubs will work in practice. With less than two months before they start, … [Read more...]
Personal Insolvency – the urgent need for change
The Insolvency Service issued a Call For Evidence (CfE) in July 2022, asking a wide range of questions about personal insolvency in England and Wales: The purpose of this document is to seek evidence that will help inform the Government on whether the current personal insolvency framework is still fit for purpose and, if not, what reforms are needed. The CfE started by saying: What should be … [Read more...]
Help with IVAs if you can’t pay because of the cost of living
Many people in an IVA are currently struggling because of the large rises in bills and prices in 2022. The Insolvency Service has now issued Guidance to support the IVA protocol. (That is confusingly laid out - look for the section headed 60) Guidance to support the IVA protocol for existing protocol compliant IVAs: 26 June 2022.) This sets out what extra help IVA firms should provide … [Read more...]
Vanguard, The IVA Adviser, QIS – all failed in 2022
Three large IVA firms failed in 2002: Vanguard Insolvency, which was wound up in May "in the public interest; The IVA Adviser, went into administration in August; QIS went into administration in November. Vanguard was closed after being investigated by the Insolvency Service On 13 May 2022, the Insolvency Service announced that Vanguard Insolvency had been wound up "in the public … [Read more...]
More than a third of IVAs fail – and this may get worse
This post was written based on statistics published in 2022. Since then, statistics have been complicated by the special measures during COVID that temporarily prevented many IVAs from failing. Statistics published in early 2024 show: one in three (33%) IVAs that started between 2016 and 2018 failed of IVAs that started in 2022, 5.6% failed in the first year. This was about the same as … [Read more...]
The 2021 IVA protocol – what has changed & will it stop mis-selling?
The IVA Protocol 2021 was published in April 2021. This replaces the old 2016 Protocol which should not be used for new IVAs after 1 August 2021. The terms of IVAs already in progress are not affected by the new version. The new Protocol aims to be easier to understand for people in debt - for example "debtor" has been replaced by "consumer" and it has been put into the typical "gov.uk … [Read more...]
How to choose an IVA firm
Which are the best IVA firms to talk to if you are interested in an Individual Voluntary Arrangement (IVA) and whether it is a good debt solution for you? If you put IVA into Google, how do you decide which of the tempting see how much of your debt you can write off links to click on? Or you could choose the person that cold calls/texts you telling you about a little-known government … [Read more...]