when your creditors sell off your debt

[pnn]

when your creditors sell off your debt to companies ie eversheds does interest still get added to it or does the interest get stopped
thanks

[MelanieGiles]

If you are in an IVA the interest is stopped from the date of the creditors meeting. If not in an IVA, you will need to check the terms of the original contract and subsequent assignment for your answer. I imagine the purchaser does have the right to charge interest.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[neverending]

Hi
In my experience ,once a debt is transfered[sold]to a collector/third party ,interest ceases,although they sometimes add on an initial admin charge to the debt.
regards

[go_4_broke]

I think once a debt is sold on (at a fraction of it's face value) it's original amount and/or interest has less relevance and (as mentioned above) they work on a fixed sum. This just acts as a licence for the buyer to shake down the debtor for whatever they can get. However in the event of being offered a serious payout, as in an IVA, I'm sure they would suddenly come up with a whole pile of interest, in order to improve their %age payout. As Melanie says I'm sure they are technically allowed to charge it.

New to the forums - but not to debt !

[neverending]

With respect I,m not sure that this is the case.
Once the debt goes to a third party I have found it easier to deal with.The secret is to make payments regularly and they tend to leave you alone.
If a third party has purchased the debt for 10-20p in the £1 then they will be quids in with most IVAs and i doubt if they will add interest.
Again I can only speak from my own experiences.
Regards

[MelanieGiles]

My experience of dealing with over 1,000 IVA's over the last 8 years agrees with Neverending.

Long live Max Recovery, for being an extremely helpful commercial market leader in this field. (And they always vote on variation meetings!!!)

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[go_4_broke]

Melanie/neverending

I'm happy to stand corrected but I think what you are saying amounts to basically the same thing.

You get an easier time from the 3rd party because they have considerably lower recovery expecations.

It also stands to reason that as they are not maintaining the creditor's original running acount they have no way of easily calculating any contractual interest.

If they don't know what it is they can't charge it, so it's easier for them just to tack on an arbitrary up front fee.

However I'm sure you would agree that just because they don't bother to calculate or enforce it this is not quite the same as it being legally stopped (as in an IVA) and can't be relied on to the same degree.

Best -



New to the forums - but not to debt !