Once a person in financial difficulties has decided on using an Individual Voluntary Arrangement (IVA) as their preferred solution to their debt problem, it is not unusual for them to experience doubts about the Individual Voluntary Arrangement (IVA) process, and how the Individual Voluntary Arrangement (IVA) is likely to be received by their creditors.
After all, choosing an Individual Voluntary Arrangement (IVA) as a solution is not always an easy decision to make, therefore understanding all the pros and cons of an IVA is an integral part of the process.
So how will your creditors react to your Individual Voluntary Arrangement (IVA) ?
An Individual Voluntary Arrangement (IVA) will protect you from your creditors.
Once the Individual Voluntary Arrangement (IVA) has been agreed at the Creditors Meeting your creditors are no longer able to contact you at all, and they surrender the right to take legal action against you.
However, there will be a period of about 6-8 weeks where you are in the middle of the IVA set-up process, and you may feel quite vulnerable.
During this time, your creditors will have been informed about your intention to propose an Individual Voluntary Arrangement (IVA) by your Insolvency Practitioner, yet they still have the freedom to call you, primarily to ask you for a payment.
Creditor calls can be an unpleasant experience and can cause real stress for someone in financial difficulties, but there are some golden rules which you can use to keep control of the situation.
If a creditor does call you:
- Stay calm and be polite, even if the person on the other end of the phone is being rude to you.
- Take the name of the caller and the name of the creditor concerned and keep a log of your conversations.
- Give the name, address and telephone number of your Insolvency Practitioner to the creditor, and explain to them that you are in the process of proposing an Individual Voluntary Arrangement (IVA). Ask them to contact your Insolvency Practitioner, as they are dealing with all your finances and have instructed you to refrain from making any payments to your creditors at all.
- Keep your call courteous, short and to the point, and try to avoid being engaged in a conversation about your repayments.
- If you are loosing control of the call, explain that now is not a good time to discuss it, and ask them to call back another time and hang up.
Things to remember about creditor calls:
- The person who calls you may not actually fully understand what an Individual Voluntary Arrangement (IVA) is. Quite often they will know only a little about the process, and therefore be misinformed of your rights!
- It is not unusual for some creditors to pay commission or a bonus to their staff for payments they collect over the telephone, so resist their pressures to make a payment.
- The person on the end of the phone will not be making the judgement on your Individual Voluntary Arrangement (IVA), so threats of “We will not accept your Individual Voluntary Arrangement (IVA) unless you make a payment” are to be ignored. On the contrary, as strange as it may appear, making a payment could have a negative impact on your Individual Voluntary Arrangement (IVA).
Making a payment to one of your creditors without making a payment to the rest of them will show you are preferring that creditor over the others. Your Insolvency Practitioner will not want you to show a preference to any one creditor over another. This is an unfair creditor tactic which rewards the creditors who apply pressure. Take notes of which creditors are applying pressure, and inform your insolvency practitioner.
The Insolvency Practitioner has the power to stop creditor action, by applying for an interim order, if it is considered to be absolutely necessary.
If you need more information about IVAs, or more information on how an Individual Voluntary Arrangement (IVA) is made to suit your personal circumstances, call My IVA Adviser anytime on 0800 088 7503 for a free and confidential chat with one of our specialist Individual Voluntary Arrangement (IVA) advisers.
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