BROKE BRITS PUSHED TOWARDS FINANCIAL FOLLY OF BANKRUPTCY AS GREEDY CREDITORS UP MINIMUM IVA REPAYMENT TERMS

• Big banks and other creditors raise IVA stakes – consumers need to clear 40 per cent rather than 25 per cent of their debt in order to qualify for an IVA
• IVAs shot up by nearly 750 per cent since 2002* (see table below)
• Debt-laden Brits helped through deal-breaker minefield to safe ground of affordable IVA
• No need to risk phone book lottery – IVA.com recommends best firms
• UK’s only comparison site for insolvency firms

BIG banks and other creditors are blocking attempts by debt-saddled consumers wanting to get back on their feet by raising the minimum IVA (Individual Voluntary Arrangement) repayment terms.

According to IVA comparison website IVA.com, giant creditors such as HSBC became disgruntled with the industry standard amount of 25 per cent of the debt and demanded 40 per cent - or no deal.

As a result, overstretched borrowers are giving up the halfway house of an IVA and caving in to the last resort of bankruptcy, says IVA.com director Terry Balfour.

“We have seen the likes of HSBC - a major creditor in the UK – demand debt riddled borrowers to settle an often unmanageable 40 per cent of their debt before green lighting them for an IVA solution,” says Balfour.

“Our concern is that many other creditors will now follow suit, forcing more and more people into the stigma of bankruptcy,” he adds

“The number of firms offering IVAs has soared over the past two years to match demand from debt-laden borrowers but as with any financial product, consumers shouldn’t sign up for the first deal they find.”

“Our unique rating system based on the real experiences of IVA customers shows which companies are the ones that really know what they are doing and can successfully negotiate between consumers and creditors,” adds Balfour.

The IVA.com site receives over 50 reviews a month and has now passed the significant milestone of 500 reviews. These range quite considerably with some firms getting a real bashing.

“If someone is mulling over the idea of entering into an IVA, they should check the reviews for the firm they have in mind before proceeding,” advises Balfour.

“Working up the courage to apply for an IVA is a big step,” he says. “It provides a huge relief for people who desperately want to start again without the stigma of bankruptcy – not to mention the massive blow of losing their house and the pasting their credit rating will take.

“Communication, sensitivity and thorough understanding of the IVA market are crucial to the success of the arrangement. It’s imperative to find the right IVA provider who will be able to help – and with the comparison tool that IVA.com offers, looking for the best practice should be fairly straightforward.”

There are nearly 1,000 IVA providers listed on IVA.com’s database covering the whole of the UK. The service allows clients to find an IP who is close enough for them to meet face to face and ensures they don’t leap from the frying pan into the fire by putting their financial security in the hands of a firm that cannot deliver.

Individual Voluntary Arrangements figures

*Source: The Insolvency Service, 2007

– Ends –

General enquiries: 0800 324 7011 / www.iva.com

Press enquiries:

Terry Balfour, Director
0800 324 7011
IVA.com
Terry.balfour@iva.com

Lucie Ager, Consultant 
01273 774109 / 07796 878263
David Andrews Media Ltd                                               
lucie@davidandrewsmedia.co.uk

David Andrews, Senior Consultant - Director
01273 774109 / 07941 255855
David Andrews Media Ltd
david@davidandrewsmedia.co.uk

Editor's notes
Founded by its managing director Terry Balfour in 2007, IVA.com is the first IVA comparison website in the UK. It is a free interactive online service for consumers looking for an IVA firm most suitable to their needs. Its database has over 1,000 UK-based IVA firms and insolvency practitioners (IPs). IVA.com brings transparency to the market by employing its unique rating system based on the real experiences of IVA customers. There are over 500 reviews and many more ratings that provide people with details of how IVA firms are performing.
IVA.com enables smaller firms to compete more effectively with the larger IVA factories.