You can be scammed or badly advised around an IVA. Sometimes that means an outright fake firm. More often it means a real lead generator, introducer or adviser pushing an IVA without properly checking whether a Debt Relief Order, Debt Management Plan, bankruptcy or direct repayment plan would be better.
IVA warning signs#
Be careful if a firm:
- Asks for an upfront fee before creditors approve anything
- Says an IVA is guaranteed
- Says your credit file will not be affected
- Says your job can never be affected
- Will not name the licensed Insolvency Practitioner
- Does not compare a DRO, DMP and bankruptcy
- Rushes you to sign during one phone call
- Tells you to leave out debts, income, assets or household contributions
- Avoids putting fees and failure terms in writing
- Contacts you out of the blue and uses pressure language
Check who you are dealing with#
There can be more than one firm in the chain. The company you first speak to may be an introducer. The IVA itself must be arranged and supervised by a licensed Insolvency Practitioner.
Before signing anything, ask:
- Who is the licensed Insolvency Practitioner?
- Which firm will supervise the IVA?
- Is the firm giving debt advice FCA-authorised, or acting under an insolvency exclusion?
- Are any referral fees or commercial relationships involved?
- Why is an IVA better than a DRO, DMP or bankruptcy in my case?
You can check the Insolvency Register and FCA Register before sharing sensitive information.
Why suitability matters#
The FCA banned debt packager referral fees because of concerns that some firms had incentives to recommend options that were not in the customer’s best interests. The 2025 IVA Protocol also emphasises that consumers should be told about available options, advantages and disadvantages before deciding whether an IVA is right.
An IVA can be a good solution, but only if it fits your facts. Poor IVA advice can leave someone paying for years when a DRO would have cleared the debt faster, or entering a formal insolvency solution when a flexible DMP would have been enough.
What a legitimate IVA process should feel like#
A proper assessment should be calm and evidence-based. You should be asked about all debts, income, essential spending, assets, home equity, vehicles, employment and household circumstances. You should receive the proposal and key facts before signing, with time to read them.
If the advice feels one-sided, pause. You can ask for the assessment in writing, get a second opinion from a free debt charity, or walk away before signing the proposal.
Related questions#
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