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IVA
People discussing how credit providers can add to their bottom line

How can Credit Providers Improve their Position?

The past two years have been difficult for most people. The Covid-19 pandemic brought about a lot of financial pressure, especially for those who were already struggling even before the start of the pandemic. As it stands, there are over 8 million UK citizens who are estimated to be over-indebted, not earning enough money to cover their monthly debt repayments. 

Naturally, the pandemic has indirectly influenced credit providers, as many of their clients were unable to pay them because they were struggling with their finances. This brings about the question – how can credit providers help now and improve their position?

Free Debt Education

Debt education has the potential to play an important role for credit providers, especially when it comes to over-indebted clients. Currently, there are very few, if any, credit providers that offer their clients free debt education. So when a client becomes over-indebted, they are often unsure of where to turn for help and land up neglecting their debt repayments. At the end of the day, credit providers rely on the financial well-being of their clients to generate an income. So, it would make sense for them to want their clients to have some degree of financial education or at least some guidance on where to turn for debt help.

People who are struggling with bad debt are often not aware that there are debt solutions available to them that can help them manage their debt. Debt solutions like Individual Voluntary Arrangements (IVAs) offer incredible benefits for people who are struggling with bad debt. IVAs are not only beneficial to indebted- people, but also to credit providers, as they are guaranteed to recover a portion of the debt owed to them, instead of having to write-off the entire debt.

Credit providers often sell debt that is considered ‘uncollectible’ to debt collection agencies at a fraction of what it’s worth. When credit providers do this, they tend to lose a large portion of the money that is owed to them. 

When a person enters into an IVA, they enter into a legally binding agreement with their creditors whereby they agree to an affordable monthly repayment that is distributed between all of their creditors for a period of five or six years. As a result, each credit provider is able to recover a much larger portion of the debt owed to them, as opposed to simply selling the debt for a lower once-off amount. As the IVA is supervised by a licensed Insolvency Practitioner, the credit provider does not need to spend unnecessary costs in chasing and collecting the debt. IVAs can, therefore, benefit credit providers by adding to their bottom line and reducing their debt write-offs.

Partnering with Debt Movement

At Debt Movement, our mission is to rescue people who have found themselves in financial difficulty. We provide non-judgemental debt guidance and services that help people move out of debt. Our qualified team of debt specialists have helped over 35,000 people move out of debt and find financial freedom.

By partnering with a trusted and reputable debt guidance and solutions firm like Debt Movement, credit providers can give their clients who are struggling financially, the opportunity to find financial freedom, whilst potentially reducing their debt write-offs at the same time.

If you would like to partner with Debt Movement, please email us on: marketing@debtmovement.co.uk

At Debt Movement, we know that bad debt happens to good people which makes them feel worried and powerless. Debt Movement provides professional debt guidance and services that help people move out of debt, empowering them to take control of their finances so they can live their best lives again.

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