Harrison said that taking out an IVA was an “alternative to bankruptcy” and said that while taking one out could affect a consumer’s credit rating, the likelihood would be that anyone needing one would have a damaged credit rating already.
In fact, he added, it could be seen as a positive move, saying: “Creditors sometimes see [an IVA] as a person being able to resolve their debts and move forward and start afresh.”
However, consumers have been warned on numerous occasions that IVAs could potentially be mis-sold as an easy way out of debt for people who could resolve their debt and credit problems by other means.
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Earlier this month, consumer group Which? said television adverts misportrayed IVAs as an easy solution and were produced by companies who, as issuers of IVAs themselves, were unlikely to recommend deals for consumers that did not involve paying fees, the Press Association reported.
Which? said consumers in debt trouble should seek help from Citizens Advice or National Debtline instead.
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