If a debt is not performing i.e the borrower; cannot or won't pay, is in an IVA, DMP or bankrupt, then it becomes a bad debt. The credit company either have to chase the debt, which costs them money, receive payment on the drip (from an IVA or a DMP) or, wait for a payment in a bankruptcy which can take many months if not years.
They therefore sell the debt on to another company, so that they can receive cash up front rather than waiting around to collect small payments on the drip.
The price paid for these debts varies depending on how long the account has been in default for but is normally quite a small percentage of the monies owed.
Kind regards, Elizabeth Pywowarczuk, Insolvency Practitioner.
If you would like me to advise you about an IVA and if appropriate propose one for you, please visit my website at www.liberta.uk.com
Thanks liberta. Cabot financial has bought a debt recently from my IVA. They claim they didnt know it was in an iva. When the debt was with Halifax (i think) when it went into the iva, it showed as settled on my credit file. now it is saying that i owe that amount to them as of two weeks ago. will the debt still be cleared after six from the date it was settled or from two weeks ago?
Sorry Julia - are you still in an IVA or has it finished?
Basically, when Cabot purchased the debt off Halifax, they stepped into their shoes as it were. They have no more rights than Halifax had before they sold it. If your IVA is still running then they can only take the ongoing dividends from it. If your IVA has been successfully completed then they are stuffed and will get nothing. Also they are not legally allowed to chase you for the debt - just their bad luck I suppose.
Speak to your IP about it and he or she will send them a copy of the proposals and chairman's report to prove to them that you are in an IVA. He or she will also send them a copy of the completion statement if the IVA has finished.
If your credit file does not reflect the correct situation, you should contact Experian or Equifax and let them know, they will then ask Cabot to remove the entry.
Kind regards, Elizabeth Pywowarczuk, Insolvency Practitioner.
If you would like me to advise you about an IVA and if appropriate propose one for you, please visit my website at www.liberta.uk.com
I am still in an IVA. I have spoken to experian who say that cabot will not remove it! charming! thanks for your detailed explanations. I am hoping to make a F and F soon will cabot affect the rest of the creditors decisions?
Cabot could be shown on your credit file as the replacement creditor for the debt with Halifax. They cannot register a default notice on your credit file. If the information is wrong (and to be honest I do not know what your credit file says and whether it is wrong or not)then they are required by law to change it under the data protection act. If they refuse to then you can report them to the Information Commissioner who will make them.
Good luck with the full and final.
Kind regards, Elizabeth Pywowarczuk, Insolvency Practitioner.
If you would like me to advise you about an IVA and if appropriate propose one for you, please visit my website at www.liberta.uk.com
