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Cowboy Operators in the Debt and Insolvency Industry

Cowboy Operators in the Debt and Insolvency Industry

Authored by Phil Meekin

Phil Meekin

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Approximate read time: 2 minutes

The debt and insolvency industry, unfortunately, has more than its share of cowboy operators. As the industry can appear complicated to the inexperienced, it’s ripe for exploitation from unscrupulous individuals.

The IVA scam

A recent scam involved targeting people who have just entered an Individual Voluntary Arrangement (IVA). This is a perfectly legitimate, legally binding repayment arrangement between individuals and their creditors. The creditors often accept less than 100% of what is due to them. However, they are still better off than if the individual enters bankruptcy. This is a means of helping the individual out of financial difficulty.

The scam? Unscrupulous “advisors” are approaching these individuals and talking them into bankruptcy, charging a hefty, overinflated fee for completing the paperwork.

What’s most appropriate?

There are situations where bankruptcy is appropriate, but each person’s circumstances are different. A good advisor will point them in the direction of the most appropriate solution. If bankruptcy is the most suitable, most people can complete the forms themselves, unless hampered by literacy problems or disability.

A lot of people are unfamiliar with available alternatives, and they’re likely to experience stress in the situation; making them more susceptible to pressure. Before you proceed with any insolvency or bankruptcy procedure, make sure you’re speaking to a licensed insolvency practice and received the best advice for your circumstances.

In summary

As with many industries, the insolvency sector is, sadly, home to some cowboy, or ‘less than reputable’ operators. Some of these charge large amounts for procedures and paperwork available for much less through a reputable provider. For the best advice for your situation, you should speak to a licensed insolvency practise offering free advice with no obligation. These are not only well-qualified experts; they are also heavily regulated and can lose their licenses if they step out of line.

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