Updated IVA guidance from the Insolvency Service will provide welcome re-assurance for people on an IVA who have been affected by the Covid-19 pandemic.
“The flexibility announced by the Insolvency Service is very welcome news for our IVA customers”, said Catherine McNeill, head of insolvency at Financial Wellness Group.
“A small proportion of our IVA customers have contacted us to tell us that their ability to pay has been impacted by the coronavirus crisis, or that they are worried that it will be. Many of these customers have been placed on furlough. In March, we put in place a package of measures to help these customers and our servicing teams transitioned to home working to enable us to continue to support customers.
“This new flexibility for us to agree payment reductions of up to 25% and to provide customers three-month payment breaks if they need it, and even if they have taken payment breaks before, is very welcome and will help prevent IVA failures. The guidance will also promote a consistent approach across the sector.
“We are delighted that major creditors and voting agents are supporting these measures. They will help re-assure customers that we are working together as a sector to support them to a successful conclusion of their IVA.”
Catherine McNeill added: “Critical workers who earn more, perhaps through additional overtime, during the crisis will also welcome the news that they won’t be expected to pay extra into their IVAs.”