IVA provider ClearDebt welcomes the proposals made yesterday (April 5) by the Insolvency Practice Council (IPC) for enhanced ethical standards for Individual Voluntary Arrangements (IVAs).
IVA provider ClearDebt welcomes the proposals made yesterday (April 5) by the Insolvency Practice Council (IPC) for enhanced ethical standards for Individual Voluntary Arrangements (IVAs). In particular, ClearDebt welcomes the Council’s restatement of the need for a face-to-face meeting between the debtor and a suitably qualified professional and ClearDebt agrees with the IPC’s comments that IVAs are rarely appropriate for people on state benefits: CleatDebt deplores that this may be taking place in inappropriate cases – often bankruptcy is a more appropriate solution for people in these circumstances.
ClearDebt also agrees with the Council’s recommendation that, under the new Simple IVA scheme (SIVA), insolvency practitioners should offer a standard fee for SIVAs (as ClearDebt already does for all IVAs).
Commenting, ClearDebt CEO, David Mond, said:
“We think that, in two key areas, the IPC should have gone further. First, we agree that face-to-face meetings with debtors are essential to ensure people understand their rights and responsibilities. We also think they may make a difference in outcomes for creditors.– Debtors who are unwilling to make a meeting may prove unreliable payers. However, ClearDebt think that, wherever possible, this meeting should be with a person who is independent from the insolvency practitioner who is putting forward the arrangement: This should ensure both debtors and creditors have maximum confidence and that the arrangement is not being mis-sold.
“We also agree that standard fees will make the SIVA more transparent, but we think the IPC should urge the government to cap fees when the SIVA is introduced. Failure to do this means, ClearDebt believes, that IVA providers will continue to operate in their current marketplace and not bite the bullet of trying to compete with companies who offer informal debt management plans (DMPs). Competing with DMPs would bring the certainty and debt forgiveness of the IVA to a much greater number of over-indebted people – many of whom have not heard of IVAs, but for whom an Individual Voluntary Arrangement would certainly be best advice”.