What does debt transfer mean for my IVA?

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This article contains information about debt solutions available in England, Wales and Northern Ireland. Debt advice in Scotland involves similar but different solutions. If you are considering an IVA as a debt solution, it’s very important that you fully understand the risks involved. Please visit our website for more information.

Debt collectors could buy your debt.

Debt collectors probably look a bit better than this

Once your IVA is approved it’s part of the deal that your creditors should no longer contact you. You might get a few phone calls and letters at first as it can sometimes take a couple of months for creditors to update their systems.

After a while the IVA should be running smoothly and the phone lines should go quiet again. Once a year creditors will send you an annual statement. This is nothing to worry about and you should keep this for your records.

You can find out more about the pros and cons of IVAs on our website.

But then something strange happens. You get a call from a debt collection company you haven’t heard of before…

“Your debt has been transferred”

The debt collection agent who calls tells you they’re chasing a debt that was bought from one of your creditors. You might panic for a second, but don’t worry; this is normal procedure.

From time to time creditors will sell debts on, even if they’re receiving a ‘pence in the pound’ return via an IVA. Debts sometimes change hands for other reasons, such as creditors moving defaulted debts off their books.

Some debt collection agencies specialise in buying debts that are subject to debt management plans, IVAs or other formal solutions. There’s no need to worry about this.

Debts which are subject to an IVA

Your debt, whoever owns it now, is part of your IVA. If you suddenly start getting calls or letters from another new collection company all you have to do is tell us, and forward on any paperwork you received from this new company.

Nothing has changed – this new collector just needs to be informed that the debt that they’ve bought is subject to an IVA. Once this is confirmed and we’ve been in touch with them they shouldn’t contact you again.

What do I say when they call?

All you need to say to the collection agent is that the debt is taken care of by your IVA and refer the collector to us. You should also ask them that any future correspondence is done in writing and that they remove your telephone number from their systems. You’re completely within your rights to request this.

The best advice

The best advice when dealing with new collection companies is to remain calm and be reassured that any debt in the IVA will stay in the IVA. You’re protected under the terms and conditions of the agreement no matter who owns the debt.

Once we’ve been in touch with the new company we’ll speak to them and make sure that they’re aware you’re doing your best towards paying off the debt through the IVA. The collections company will know that they can no longer contact you, or chase you for this debt.

This might not ever happen to any of your debts, or it could happen a number of times on the same debt. If you do get a call just refer the matter to us and we’ll take care of the rest.

Matthew worked as an IVA drafter prior to working in social media. In a former life he wrote scripts for Eastenders, Emmerdale and Hollyoaks. He has 3 chickens, 2 dogs and a rabbit.

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