Changes to IVAs proposed
Published On 11 May 2007
The Insolvency Service has begun a 12-week consolation process investigating proposals to simply Individual Voluntary Agreements (IVAs).Under the new proposals, the rules will be changed for people with undisputed debts of less than £75,000. If accepted, the rules will alter so IVAs can be approved by a simple majority vote.
Equally, creditors would no longer be able to change the debtor's proposals. Creditors would also have to file all claims within 90 days.
It is also hoped that the proposed rule changes will make it easier for insolvency practitioners (IPs) to supervise the IVA process and, in so doing, reduce the administrative costs that people in debt have to pay.
IVAs were first introduced over 20 years ago to "provide a flexible debt resolution alternative to bankruptcy for professionals and company directors". Now, however, they are widely used by people with full-time jobs to manage their debt burden.
Recent figures from the Insolvency Service show that there has been a sharp rise in the number of people seeking IVAs over the last year.
Data suggests that there were 13,233 IVAs in the first three months of the year, 47.6 per cent more than in the same period in 2005.
The consolation period for the new rules will end in August, after which the Insolvency Service will review the situation.
