Bank and debt agency amnesty could ease IVA issues
February 10, 2008
Individual Voluntary Arrangements, also known as IVAs, could become more transparent and more easily accepted by creditors following an amnesty that has been called between banks and IVA agencies. The Insolvency Service has drawn up a new protocol that has been drawn up with the input of debt agencies, consumer groups, and creditors, and could see a higher level of IVAs being accepted in the future following a period where many creditors were refusing an increasing level of IVAs.
One industry official stated that the protocol would make the whole process clearer for consumers too, adding that some had been afraid to enter into an IVA because they thought that their homes would be at risk, but this is not the case.
Speaking of the protocol he said: ‘All this does is tighten up and simplify what’s already in place. I’m not sure we will be forwarding more people for an IVA, but this means that more people should be accepted and less will have to resort to bankruptcy.’
An IVA is known as a softer alternative to bankruptcy, and over the past few years, with an increasing number of people finding themselves in unmanageable levels of debt, these IVAs have become far more widely advertised in the UK. However, consumers often do not know the ins and outs of this process other than being told that they could be free of debt in five years.
The Insolvency Service has taken responsibility for production of the final document, and the amnesty has been welcomed by all sectors of the industry including creditors, campaigners, and debt agencies.
Comments
Got something to say?