How do you know you’re getting all the right advice?
… that you’ve gone to the right person for advice?
It’s important because you’re probably quite vulnerable right now…
Here are just some things you may be told that simply aren’t true!
- ‘Your family’s credit rating is effected by the decisions you make’
It’s not true: everyone has their own personal credit rating. Click here for some useful guidance on the BBC website
- ‘You will lose your home if you go bankrupt‘
It’s far from certain you’ll lose your home if you go bankrupt. You’re just as likely to lose your home if you go into an IVA. When you’re talking about something as emotional as the roof over your head, it’s easy to lose perspective. Take some time to really understand what each option means for your home. And challenge your adviser!
- ‘Paying something back through a debt management plan or IVA will better protect your credit rating than going bankrupt‘
The reality is your credit rating will be damaged for a long time whatever solution you take. Follow these links: Link 1.Link 2Link 3. This means that protecting your credit rating should not be the over-riding driving force for the actions you take
- ‘You and your partner must take the same route for solving your problems because you’re a couple‘
No you don’t! You and your partner are your own ‘legal person’ – you have your own assets, debts and options for solving your problems, similarly for your partner. Even if the same solution should be appropriate for both, which it isn’t always, sometimes there are advantages for one of you to delay the solution
- ‘The Official Receiver will take control of your bank account‘
No he won’t, the bank account you’re thinking about is the one he opens up specifically for anything he sells in the bankruptcy. Your own income and payments will continue to pass as normal through your own personal account, the Official Receiver won’t have access to it. However, some banks won’t continue to deal with you – so just open up an account elsewhere – it’s really not that difficult!
- ‘Going bankrupt will stop you ever getting on the property ladder‘
No it won’t! It may mean you may have to pay more to borrow in the future but by that time inheritances from relatives, the saving of a large deposit could make buying easier
- ‘An IVA will give you peace of mind‘
No it won’t! A 5 year IVA merely means you lie awake at night worrying about how you can maintain your payments into the IVA rather than how you’ll keep your creditors at bay
- ‘Your creditors don’t want to see you go bankrupt, but they’ll readily accept a debt management plan or IVA because they want to see you take control of your finances’
Ok, thore’s some truth in this – creditors do want you to take any solution other than bankruptcy because it means they have to write off less. But their driving force is purely self interest. Even then it doesn’t mean they’ll not make any DMP or IVA easy for you, it’ll really hurt. For many people it’s only their perception of bankruptcy that holds back tens of thousands more doing what’s really best for them. The good news is perceptions are changing
- ‘IVAs offer the perfect solution for people with credit card debts they can’t ever hope to pay’
IVAs merely merely offer a different sort of pain. A battle between the banks and the insolvency profession has seen a standard form IVA drawn up called the ‘IVA Protocol’ which contains the detailed terms of 90% plus of IVAs. It’s a really horrible document, favouring your creditors, not you. Ensure you read it, fully understand every paragraph, because once in an IVA governed by the protocol, there are really only two ways out – fully comply with it and suffer all the pain that comes with it, or go bankrupt. Click here to go to our links page to find out more about the protocol
- ‘You don’t pay the costs of the solution, your creditors do‘
This is merely advertising speak to encourage you to sign up. You pay the costs in one way or another
- ‘Why pay for advice when you can get it free?’
There’s a lot of truth in the saying you get what you pay for. OFT registration counts for nothing. Some debt advisers are ‘one trick ponies’ driven by commission to provide you with the solution that pays them – only by chance will it be the right decision for you. Others are inadequately trained and although well meaning simply don’t know what they don’t know. Even government agency brochures are misleading! It pays to get the very best advice you can afford to pay for.
If you’d like some advice on your situation, give us a call on 01902 672323.