You are here: Home - Uncategorized -

Debt companies hit hard times as creditors get tough

Written by:

Debt companies are experiencing tough times as more creditors refuse to accept the terms of the individual voluntary arrangements (IVAs) offered to them on behalf of their indebted clients.

An IVA is an alternative to bankruptcy, whereby creditors come to an arrangement with their creditors, usually banks and other lenders, to have a proportion of their debts written off and to repay the remainder over a number of years.

A host of companies has sprung up in recent years specialising in setting up IVAs for people in return for a commission on each case, making a substantial UK investment in this activity.

The business looked set to be a profitable one, but in recent months creditors have started rejecting the offers made by the debt management companies and demanding that creditors are put into bankruptcy, for example. This means debtors may have to sell their homes to settle their debts.

Two companies – Debt Free Direct and Accuma – admitted that some lenders were now refusing their proposals and demanding that they cut their fees, a severe blow to their entire method of generating profits and their UK investment in the business.

Another firm – – reassured investors last October that business was healthy and that it soon hoped to be processing 500 IVAs per month, but that proved to be an overly optimistic forecast.

Accuma warned of lower than expected business levels and blamed “increased resistance amongst a small minority of creditors that is affecting IVA approval rates.”




Related Posts


Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co... Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Statements of fact – all 75,000 of them

A woman who holds her UK current account with Halifax Bank of Scotland (HBOS) was surprised when, in response to her...