‘IVAs can help when used properly’

The Citizens’ Advice Bureau (CAB) has said that people in debt could be helped by Individual Voluntary Arrangements (IVAs), although they need to seek impartial independent advice before entering into one.

Following a report on BBC’s Watchdog programme that suggested some IVA companies were not honouring the legal contract, the CAB has commented that people need “good appropriate advice” given the complex nature of IVAs.

“I think that there is some evidence that people are not always getting the right advice,” said Moira Haynes, CAB spokesman.

“Some people are being drawn into IVAs when it is not appropriate for their circumstances.”

IVAs are a legal contract which is an alternative to bankruptcy for those in debt. However, Ms Haynes continued by saying that they are “not a magic solution” and may not be suitable for everyone.

Those who enter into an IVA – such as people who are over-indebted due to credit cards and loans – make an agreement with their creditors regarding the discharging of outstanding debts.

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