Insolvency Service research findings into Individual Voluntary Arrangements (IVAs)
Insolvency Service research findings into concerns about take-on practices for Individual Voluntary Arrangements (IVAs).
Applies to England, Northern Ireland and Wales
An Individual Voluntary Arrangement (IVA) is a form of debt relief under the Insolvency Act 1986 that are available in England, Wales and Northern Ireland.
While IVAs can work well for many, if an IVA is unsuitable, it can leave consumers struggling with their household budget, being in debt for longer, or even acquiring more debt to make IVA payments.
As a result of concerns in this area, to understand if there is a problem, the extent of the problem and what form that problem might take, the Insolvency Service commissioned RSM UK Creditor Solutions LLP in November 2023 to carry out ‘Research into Concerns around IVAs’.
Read the full report:
The following information addresses the main concerns that may arise from the findings of the research.
Incorrect information / poor service
If you’re concerned about:
- the information you received when first considering your IVA
- the service you received during the initial stages of your IVA
Speak with your insolvency practitioner (IVA provider) in the first instance.
If you’re unhappy with their response, you can submit a complaint to them under their complaint procedure.
The insolvency practitioner’s complaint procedure must include details of how to escalate a complaint to the Regulator.
Your insolvency practitioner and the proposal documents you received should also state if any information you received was authorised by the Financial Conduct Authority (FCA). If information was given by a third party, there should be details of how to contact that firm with your enquiry.
For more information about how to complain about an insolvency practitioner:
www.gov.uk/government/publications/insolvency-practitioners-guidance-for-those-who-want-to-complain
If you’re unhappy with how a complaint is handled
If you have been through the insolvency practitioner’s (IVA provider) complaint process and are unhappy with their response.
You can refer the matter to the:
• Regulator through the Insolvency Service
• Financial Conduct Authority (FCA) - if your complaint is about advice you received from an FCA authorised firm.
How to submit a complaint to the Insolvency Service:
Complain about an insolvency practitioner
If you complain to the Insolvency Service, you must include the reply you received from your IVA provider. You’ll need to provide as much evidence as possible of the poor practice you believe you received.
The Insolvency Service is only able to refer complaints about suspected misconduct.
This means that we are unable to:
- change the status of your IVA
- reverse any decisions
- get you financial compensation
It is not possible for either the Insolvency Service or FCA to intervene directly in your IVA, to change or reverse any previous decisions made, or to cancel an ongoing IVA.
How to complain to the FCA:
www.fca.org.uk/consumers/how-complain
Do not stop making your IVA payments
Do not stop making payments to your IVA.
If you stop making payments, you will be in breaking the terms of your IVA agreement, and your IVA could be cancelled/ended.
If your IVA is cancelled/ended, you’ll need to deal with your creditors directly and will no longer have protection from your creditors taking recovery actions against you.
You’ll still need to repay your outstanding debts plus any interest that has built up while your IVA has been active.
It’s important that you speak to your IVA provider (insolvency practitioner) or a free, regulated, debt advisor about your options before stopping any payments.
Get free, regulated debt advice
Cancelling an IVA
You can cancel an IVA once it has started, but you must make sure you understand what will happen if you do.
You’ll need to repay your outstanding debts plus any interest that has built up while your IVA has been active.
Once your IVA is cancelled, your creditors will no longer be restricted from contacting you for repayment or taking action to recover their debt.
Speak to your IVA provider (insolvency practitioner) or a free, regulated debt advisor about your options before cancelling your IVA. They will explain your options and the consequences of cancelling your IVA.
If you decide to cancel, your IVA provider will end your IVA and will send you a certificate of termination.
Get free, regulated debt advice
IVA scams warning
Criminals often try to take advantage of Government research or consumer warnings to carry out scams.
Scammers will try to extract money from you, by offering to help you get compensation or tell you they can get you out of paying your debts altogether.
Common things to look out for are:
- being asked for upfront payment for a service
- being advised to redirect your regular IVA payment to a 3rd-party
- claims there is a compensation scheme,
- claims their ‘service’ is backed by ‘government legislation’
- guarantees you’ll be able to complete your IVA early or that your IVA provider must agree to this
- advice you should stop making payments into your IVA, without any explanation of what it means
Get more information about insolvency related scams:
Insolvency ‘scams’ – what to look out for
Insolvency Service related scams and fraud
IVA research information
This piece of research was commissioned by The Insolvency Service.
How the research was undertaken
The research looked at 310 randomly selected IVAs, which had been both registered and terminated between 2021 and 2023. It found that there was concerning practice about the way they are taken on over in more than half.
The researchers focused on IVAs terminating within the first 2 years after starting. The majority of IVAs conclude successfully.
Research focus
The research carried out was not looking into professional misconduct or illegal activity in relation to IVAs. It looked at and measured whether there were practices to be concerned about during the sign-up process for IVAs.
The research did not consider if poor practice led directly to the failure of any individual IVA.
If you have concerns about either the information you received or the processes during the initial stages of your IVA, you should speak with your insolvency practitioner (IVA provider) in the first instance.
Data privacy and the research
To protect people’s identities, individual data was replaced with a pseudonym before the findings were shared with the Insolvency Service. We are therefore unable to identify any individual whose IVA may have been subject to poor take on procedures.
You will not be contacted by the Insolvency Service.
The Insolvency Service does not hold details of which IVAs were included in the final research sample, consequently, we are unable to respond to requests to confirm if an individual IVA was included in the research.
Cases selected for the research were randomly sampled and were taken from across a range of IVA providers.
Privacy notice
In January 2024, the Insolvency Service issued a privacy notice: Processing personal data for Individual Voluntary Agreement Research, which explains how personal data was processed for the research.
We do not provide debt advice
We are unable to respond to enquiries about individual IVAs and do not provide debt advice or guidance.
If your enquiry is about an individual IVA, please contact your insolvency practitioner (IVA provider).
For free, regulated debt advice
For more information about IVAs, read our related news article.