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IVA
Someone trying to work out if credit providers and debt solutions firms should be best friends

Credit Providers vs Debt Solutions Companies. Arch Rivals or Best Friends?

There will always be people who find themselves in difficult financial situations, and most of the time it’s due to no fault of their own. Unfortunately, it’s often credit providers who feel the blow when their clients are unable to pay their debts.
Life will often throw curveballs and sometimes the only way for people to get through them is to get help, and this is where debt solutions companies like Debt Movement come in.

Credit Providers vs debt solutions Companies

It’s no surprise that the number of people who are struggling with their finances has somewhat increased due to the pandemic. But why do credit providers often view debt solutions companies in a negative light when their only goal is to assist those who are struggling with bad debt?

What many credit providers don’t realise is that debt solutions companies actually assist them in recovering a portion of the debt owed to them by their over-indebted clients.

How do Credit Providers Benefit from Debt Solutions Companies?

Debt solutions companies like Debt Movement offer debt solutions including Individual Voluntary Arrangements (IVAs). These types of debt solutions assist over indebted people to manage their debt.

Despite a portion of debt being written off at the end of the IVA, there are still many benefits to a credit provider.

Under normal circumstances, credit providers 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, and even though the debt is sold to the highest bidder, the rates paid for delinquent debt is still Pennies on the Pound.

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 over a period of five or six years. As a result, each credit provider can generally recover a much larger portion of the debt owed to them, as opposed to simply selling the debt for a much lower one-off amount.

Furthermore, since an 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.

Partner With Debt Movement

By partnering with a trusted and reputable debt 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: marketing@debtmovement.co.uk

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