IVAorg's New Approach to IVAs
All IVA providers charge fees for the work they do in preparing and administering an IVA.
There are no exceptions. So, if you want to do an IVA, someone has to pay for it.
How IVA fees work
Creditors allow all IVA providers to take their fees out of the money paid into the IVA pot by the IVA customer.
It is currently normal practice for IVA providers to be allowed to take some of their IVA fees first, so they get paid faster at the start of the IVA.
Unfortunately for creditors this reduces the amount of money they recover in the early stages of the IVA.
But, so long as the customer gets to the end of the IVA without experiencing any issues, all outstanding debts are written off, leaving the customer debt free.
This means that when an IVA completes successfully it's the creditors who pay the IVA fees, by sacrificing some of the customer's repayments and writing off more debt.
When an IVA fails
But what happens if a customer can’t get to the end of the IVA because they hit payment problems?
Current industry statistics show that 1 in every 4 IVAs fail
Who pays the fees when an IVA fails?
When an IVA fails the IVA customer, once again, becomes responsible for all their original debts.
Unfortunately, not all the money they have paid into the IVA will have been used to pay their debt as some IVA fees will have already been taken.
This means that when an IVA fails it's the customer who pays the IVA fees.
The fact is that a customer whose IVA fails will lose all the money taken to pay fees up to the point their IVA was terminated, whether it was their fault or not.
Depending on how long the IVA has been running, this could amount to thousands of pounds.
Shockingly, current industry statistics show that 1 in every 4 IVA customers are, potentially, paying thousands of pounds in IVA fees and yet still end up no better off.
The IVAorg New Approach
The team at IVAorg CIC feel that taking IVA fees in this way is unfair.
So we have introduced a new and, we believe, a more ethical way of doing things.
Our unique approach proposes that creditors will be entitled to receive money from the very first IVA payment.
We propose that we spread our fees evenly across the whole term of the IVA, which means your creditors will recover more money, faster.
As you can see in the 2 examples below, the difference this simple change makes is huge.
The example below shows a comparison of the 1st year’s contributions for someone paying £230 per month into their IVA.
It also shows the clear comparison between amount taken in fees against the amount used to paid off debt in each model:
Out of total contributions of £2760
£1978 are taken in fees with only £690 being paid to creditors
Ethical IVA Model
With exactly the same contributions
only £720 are taken in fees with £2040 being paid to creditors
IVAorg’s Ethical Pledge
But that’s not all.
We are committed to improving outcomes for all those vulnerable individuals whose IVAs fail through no fault of their own, so we have a unique ‘pledge’
“Should your IVA fail to complete successfully through no fault of your own, we will ensure the fees you’ve paid for our services will be used to reduce your debt to the maximum effect, guaranteeing to leave you no worse off.”
Which ensures that we, too, are invested in giving your IVA the very best chance of reaching a successful outcome.