www.iva.co.uk

I have been told that when companies sell debts on, the buyer normally takes them over for between 10 and 20 % of the value of the debt. Is this accurate?

Thats interesting abc. I have found out that one of my creditors has sold the debt on. I'm concerned that my IVA was agreed with the original creditor and not the new one and if this is accepted practice will the new creditor want more dosh. As if what you say is correct they will want to capitalise on their investment.

It is becoming more common for credit card companies to sell their debts to a third party company. Sale of consumer debt is now a well established strategy within the UK financial institutions. Last year it is estimated £5bn of consumer debt was sold.

Rest assured that it will have no effect on your IVA. The purchasing company are bound by the same rules and can only expect to receive the same level of dividend as proposed in your IVA. Becuase they purchase the debt at such a low figure, most of the time they will still make a profit even at the level offered by the IVA.

I hope this helps put your mind at rest.

Kind regards
Brian Baker



Finebridge Ltd
22 Laud Street, Croydon, CR0 1SU
0800 180 4212
www.finebridge.co.uk

I actually find the assignment companies far more commercial in their approach than the original banks. I suppose that is because they stand to make a profit out of their investment.

Some companies are actually purchasing the debts for much lower than even your 20% assumption as well!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Whilst they are purchasing the debt at a low pence in £ they are looking to achieve around 30% on the block of debt.

Melanie is right that the companies are very commercial and prefer to have guaranteed payments or even better lump sum settlements..... it is to do with the mechanics of how they buy the debt.