Changes to the Consumer Credit Act that came in to effect in October 2008 could cause confusion among consumers who are currently in an IVA and also additional work for IVA Companies in dealing with customer concerns.

The change means that customers on an IVA will now start to receive statements showing up to date balances and charges on their individual debts. Historically as soon as you entered an IVA creditor correspondence stopped. This means that people who have been in an IVA for a number of years are likely to panic when they receive a statement and are likely to misread it as a demand for payment.

Mark Sands, insolvency director at Accountancy Firm KPMG is quoted as saying: ‘This will be an extra burden and cost to the insolvency practitioners,’

‘The sooner it is stopped and looked at properly by the government the better.

‘Some of the consumers in IVAs may not have heard from their creditors in years. They may not understand what has changed and the IPs may be unprepared to handle the problems,’ he added.

IVA TV believes the best solution would be for people in IVA’s to be exempt from this requirement. If this is not possible then an alternative is that all correspondence is sent to the Insolvency Practitioner administering the IVA.

Statements of debts owing are relatively unimportant once you are in an IVA as the balance owing at the end of the IVA will be written-off.

An opposite argument to this though is that if your IVA fails then your debt will remain so perhaps you should keep track of what it is in case your don’t keep to the terms of your IVA?

If you are confused please do not hesitate in contacting us at IVA TV to discuss further – 0800 0483 651.