www.iva.co.uk

Hello,

I had two debts with Creation Consumer Finance for a Loan and a Credit Plan for Furniture, and both were being handled as part of my IVA.

Today I received two letters welcoming me to Lantern Debt Recovery for these debts, but I'm confused.

Why would a Debt Recovery Company buy a debt that they won't fully recover? A substantial amount of these debts will be written off at the end of my agreement, so I'm not sure what's in it for them?

I rang them because I wasn't sure that they were aware of the IVA, but they are and now they want me to contact creditfix to make sure dividends go to them and not creation.

Is this my job to do so? I would have thought all the admin would be handled by the IVA company.

It would be wise to tell CF as their admin isn't all it should be !

Debt recovery firms often buy auction type 'lots' of debt, for pennies in the pound, without knowing what debts are contained until bought ( a bit like those warehouse pallet returns you see) and only discover an IVA when they attempt collection --- less scrupulous firms will try to collect anyway in the hopes of getting away with it.

Say your debt was £100, with a dividend of 30p in the pound, the IVA would return £30. The debt collection firm might buy the debt for £10, so will still make £20 from the transaction. If only the lenders would offer this sort of chance to purchase the debt to the consumer as an alternative to a lengthy IVA --- but I guess that would be asking for trouble !