Julian Knight: In debt? Then steer clear of these IVA rip-off merchants
Sunday 09 May 2010
Coming out of recession is often the most dangerous time for your personal finances.
In the early 1990s, the biggest year for repossessions wasn't when the economy was contracting but when it was starting to grow again. Now accountancy giant Deloitte has warned that bankruptcies and individual voluntary arrangements (IVAs) are set to jump over the rest of the year as individuals who have been battling to survive finally give up, a little like exhausted survivors from a shipwreck clinging to a piece of wood for hours on end, just letting go and slipping beneath the waves.
And this is all before the extra pressure of unavoidable tax and interest rate rises over the next year or so. As far as bankruptcies, IVAs and even repossessions are concerned, the recession may be seen as a bit of a "phoney war" because, for most of us who have kept our jobs, the effects of the 6 per cent shrinkage of the economy has been barely noticeable. Apart from wage freezes, the news has actually been quite good, with interest rates at a once-in-a-lifetime low, and inflation, until lately, well below the norm. The pain, though, is now on the way. And the big question is – will it stop us spending or not? If it does, then the double-dip recession will happen.
If you're one of those people who has struggled, or who feels that they will be vulnerable, then a quick piece of advice. Please ignore the siren calls of firms offering to solve your debt problems. They will have names and websites which make it seem they are both free and impartial, but nothing could be further from the truth.
These IVA providers will negotiate with your creditors to reduce your overall debt burden, but in the process will load you down with exorbitant fees and all too often leave you with nothing to live on – just as long as they get their pound of flesh. And by entering into an IVA, you will be tagged for future credit. My experience in dealing with these firms is that they are nothing but exploiters, ripping people off for the same service that debtors can get – free – through a debt charity such as the Consumer Credit Counselling Service. In the amoral ocean of financial services, IVA providers are bottom feeders.
On this point, I recently received a cold call – which is against a code of practice agreed with the lenders – from one of these IVA providers asking whether I had debts and if I wanted to reduce them by up to 75 per cent and "one easily managed monthly payment". They were careful not to give the firm's name and when I quizzed them further they got spooked and actually put the phone down on me – a first, I'm sure. A few days later, a friend of mine told me they had received a similar call. It seems to me that the IVA industry, reading the runes of the economy, is gearing up for another assault on the consumers of this country.
Good-bye to all that
Were you up for Lembit Opik? Doesn't have quite the same ring to it as Portillo does it? Nevertheless, Thursday's election night was pure drama with shock results aplenty. Sad to see Mike O'Brien (Labour) and Nigel Waterson (Conservative), both of whom have done good work on pensions, get the chop, bewildered by why anyone would re-elect Glenda Jackson and stunned at the gracelessness of the speech made by the losing Tory in Westminster North, Joanne Cash, who blamed "press lies" for her defeat. If you want to see toys thrown out of the pram check it out on YouTube.
But one thing is certain, amid all the human drama, the electorate has said to the politicians that you have to get away from the old tribalism and actually work together. In recent years they have failed us at almost every turn, so let's see if they are now up to the task.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
- 3 Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
- 4 Kanye West stops concert after two fans don't stand up - doesn't realise one is in wheelchair and the other disabled
- 5 QS university world rankings: Imperial College London leapfrogs Oxford to join Cambridge as best British university
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
Portuguese academic says British are 'filthy, violent and drunk'
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
iJobs Money & Business
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...
£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony