In January 2007, the Insolvency Service assembled a broad range of stakeholders to consider how to achieve greater acceptance of IVAs
by banks and credit card companies, who are increasingly placing hurdles and their own criteria in the way of debtors.
But many people don't realise that signing an IVA
will damage their credit history and lock them into a long-term repayment plan.
The new standards look set to ease the lender backlash against IVAs
. That caused a widespread sell-off in the sector earlier this year after two major providers, Accuma and Debt Free Direct, issued profit warnings citing creditor resistance.
Some suggested in advertising that clients could use IVAs
to repay little more than 10% of their original debts.
are agreements whereby money owed is shared out between creditors.
Vendors that offer IVAs
now have to figure out how to deliver these solutions cost-effectively and identify best practices.
Some customer-service scenarios truly require the human touch, and Next IT IVAs
help optimize contact-center resources as expert problem solvers.
But the group warned that while the television adverts for IVAs
- which often promise to reduce debt dramatically, sometimes by 80 per cent or more - may make them look tempting, the companies arranging them were under no obligation to give the best advice.
allow creditors to keep their homes and even today the stigma of bankruptcy is sill an issue for many professions.
Lenders and big IVA
companies have been trying to agree on a a code of practice.
are arrangements that see the debtor come to an agreement with creditors over repaying money.