It looks like Cleardebt, and our clients and website users, may have played a part in changing banks, credit card and loan companiesâ€™ attitudes to IVAs for the better. Last year the following public petition was posted on the Downing Street website.
“We the undersigned petition the Prime Minister to Bring about a fair balance between the rights and responsibilities of consumer debtors and their bank and financial institution creditors, and enable as many people in debt as reasonably possible to have fair access to the full benefits of insolvency legislation by bringing in a) legislation to enforce the Banking Code and b) at least until that is in place, relaxed best practice requirements in relation to the IVA personal insolvency procedure to take account of the bank’s present actions.”
The petition got 553 signatures and, whilst we canâ€™t be sure, it looks as if around 400 of them came from people who followed links from our email newsletter.
If you were one of those who signed, then we think you played a part in helping put pressure on lenders to support IVA reforms which should ensure more people get the debt resolution they need in 2008. Hereâ€™s the prime ministerâ€™s officeâ€™s response (posted to their website on 29th February 2008):
“The Government is fully committed to ensuring that individuals in financial difficulty are able to deal with their debts, whether through formal statutory procedures such as bankruptcy or IVA, or informal debt management processes. This in itself recognises that there must be a fair balance between rights and responsibilities of debtors and creditors.
In terms of IVAs, the Government has sought to apply legislative change where improvements could best be achieved in that way. The proposed introduction of Simple Individual Voluntary Arrangements is an example of this. However, at the same time it recognises that it is better in many cases to seek agreement between the various parties as to how insolvency procedures should work in practice, within the legal framework.
To this end a draft protocol was finalised and agreed at a forum held on 29 January 2008, and took effect from 1 February 2008. The protocol makes it clear what is expected of both creditors and debtors and removes some of the uncertainty about what constitutes best practice within the IVA process.