The vast majority of UK based lending institutions are said to be taking a far tougher stance towards new applications for Individual Voluntary Arrangements or IVA’s, suggests one expert.
For those not in the know, the Individual Voluntary Arrangement or IVA is a tool used by the seriously indebted, which allows said person to offer a payment alternative to their creditors, which usually involves a sizeable chunk of the original debt being written off.
However, the IVA industry has been heavily scrutinised by both the media and large financial institutions, primarily for the way in which said firms are supposedly overselling the specific benefits associated to the procedure and also the way in which the procedure is publicly promoted. As a result, creditors are becoming reluctant to cohere to the terms of an IVA, with many just rejecting any alternative payment proposal outright.
An industry spokesperson suggested that due to the sharp rise in the number of new IVA cases, many financial institutions are attempting to resolve discrepancies with the customer direct, before the IVA route is even considered. However, critics have panned certain lenders for trying to re-sell larger consolidation loans to indebted consumers, as a means to avoid facing the terms of an IVA agreement.
