What does 'debt forgiveness' mean in practice?

[ordinary_world]

Hi all,
It is often highlighted that 'debt forgiveness' is one benefit of an IVA (in addition to protection from creditors, keeping agreed assets etc).

What does debt forgiveness mean conceptually and in pactice?

Do mainstream creditors recognise this term and view us any differently from those who have gone bankrupt?

If so, how? If not, why not?

Thanks


OW

- 'I wont cry for yesterday 'cause there's an ordinary world somehow I have to find...'

[Adam Davies]

Hi
In an IVA your creditors agree to write off any unpaid debt at the end of the IVA,this is debt forgiveness.
Regards


Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[ordinary_world]

Hi Andy,
Thanks for this. Hows does this differ if you're made bankrupt?

Is it that in an IVA, the creditors are agreeing to write off debt whereas in Bankruptcy they HAVE to write off the debt?



OW

- 'I wont cry for yesterday 'cause there's an ordinary world somehow I have to find...'

[Adam Davies]

Hi
Yes,in bankruptcy unsecured creditors have no choice in the matter.

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[ordinary_world]

Ok, so given this is the case, would one expect high street creditor's to treat ex-IVAers differently to Bankrupts (e.g. be giving more favourable rates, card services etc)

If not, then I'm not sure where the sense of forgiveness is.



OW

- 'I wont cry for yesterday 'cause there's an ordinary world somehow I have to find...'

[Adam Davies]

Hi
I think banks tend to treat IVAs and bankruptcy the same.
I have a feeling that in time banks will realise that anyone that has survived and paid an IVA for five years is once again a fairly good credit risk so we may see some movement in how they view people who are post IVA.
regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Beechy]

Hi
Debt forgiveness is the Banking term for right off, it just makes banks appear benevolent.
If it says in the annual report debt forgiveness was £xxxxx , it sounds better than £xxxxxx was written of.
The other way banks and lenders inform investors of there current potential right off’s is by using the word provisioning.


Dave Beech

[ordinary_world]

So there's no real tangible benefit of 'debt forgiveness' for us then?








OW

- 'I wont cry for yesterday 'cause there's an ordinary world somehow I have to find...'