When you have recognised that are suffering financial difficulties, and feel there is nowhere to turn, there is now a wealth of firms offering advice as either insolvency practitioners, debt management companies or charitable operations.  Many of these companies operate with extensive marketing budgets, and the media is full of companies offering to assist you to write off substantial portions of your debts.  To the untrained eye, the decision as to which company to instruct can be daunting, in an area where there is yet such a degree of conflicting advice.  If you feel that you are unable to cope with the financial pressure any more, it is usually wise to obtain two or three options in order to find a balanced view.  But what sort of things should you ask an advisor in order to arrive at a decision to instruct them?  I have listed a few pointers which should help.

1  What solutions do you offer?  Most firms specialise in either Individual Voluntary Arrangements (IVA) or Debt Management Plans (DMP).  As such, the advice you receive may well be biased towards the core business of that particular firm, and you may not receive adequate advice as to the advantages of all options available to you.  Make sure the advisor you choose counsels you on the implications, advantages and disadvantages of bankruptcy, IVA’s and DMP.  Beware anyone who tells you what you should do straight away - but favour those who recommend that you have a good think about all options and choose the right solution.  Bear in mind that the wider the options available at each advice firm, the more likely you are to get best advice and choose the right solution.

2  What procedure should I choose?  From your chats with the advisors, does it feel to you that clear ethical procedures are in place and followed by all staff who will be working on your case.  Is the firm able to provide you with feedback from other clients, have they received positive or negative feedback on the iva.co.uk forum, and have they given you the opportunity of a face to face meeting?  Do you generally get a gut feeling that the firm is going to act in your best interests, or are they only interested in taking your money?  Ask your creditors if they have heard of the advisor, and do they have any postive or negative comments to make.  Ask them what their track record success rate is at creditor meeting approvals and successfully completed proposals.

3  At what point will you recommend a solution?  Are they telling you to do an IVA before they have gathered up all of the information from you and conducted a detailed telephone or face to face interview?  You should be wary if they have not fully investigated your personal circumstances prior to providing advice.  Anyone who comes up with a sensible solution in less than half an hour, is probably being motivated by selling you a specific product rather than finding the right solution to suit your circumstances.

4  Do you charge for advice?  You should be wary about paying for advice until you have agreed upon a solution.  Many advisors would prefer to see you paying contributions straight away, even when your proposals are being researched and prepared.  This is a good way of ascertaining whether you can afford the payments prior to formally committing to a repayment plan, however do ensure that your advisor offers you a full money back guarantee in the even that the solution is not acceptable to your creditors, or you change your mind.  After all this money is money which should be held in trust for your creditors at the end of the day.

5  What is the process?  How much work is the advisor actually going to be doing for you?  Will you be left to fill in complicated and lengthy documents on your own?  Will they write to your creditors and deal with queries in the meantime?  Can you ring them at any time for advice?  What is the timescale for completing the work?   Are they going to refer you on to another advisor?

Before you contact the company have a detailed list of your creditors and a household budget showing your income and expenditure (not including unsecured debt repayments) to hand.  Also make up a checklist of questions you wish to ask, and then you can compare the answers in making your final judgement.  Remember you have to work with these guys perhaps for the next five years, so the “marriage” must feel right and you must be assured that they are going to look after your interests as well as the creditors in the long term.

Happy hunting to you all, and don’t forget to use the forum for more specific advice.

This entry was posted on Friday, February 16th, 2007 at 11:54 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.