Melanie Giles (IP) Blog

I found out yestereday that following my nomination for the award of Insolvency Practitioner of the year (Personal Insolvency) that I have been shortlisted for the award ceremony to be held in London on 30 October 2008. I find this whole thing a little overwhelming, as in truth I am a fairly private person and do not really welcome a large amount of publicity, but I am seeing this honour as a way of thanking my team for all of the hard work they have put in over the last couple of years to build our practice to enjoy the reputation we currently have in the marketplace.

So some of us are of to a professional photographers on Tuesday to get some snaps done to use on the evening of the awards and for publicity both prior to the ceremony and afterwards. I hate having my photo taken, and always end up looking like a beached whale! but I am told that sympathetic lighting and a touch of airbrushing can work wonders these days. So the photographer has been instructed to transform me to a Size 10!

In the practice we had a fairly quiet August, I think most people were concentrating on having their final holidays whilst the children are still off school, and then getting the kids back to school – and what an expense that seems to be these days. We are talking to a number of new clients in September now, and are noticing a trend of people with high value properties with high secured borrowings, wanting to pull out and find cheaper rented accomodation and then be able to deal with their other debts. I think that this is a trend which we will continue to see over the next few years.

Off to Frugal Friends in Slough this evening, which is being kindly sponsored by Vincent Bond – providers of a range of debt solution services with whom I do a little work on formal insolvencies. I hope that we will have a good evening, and whilst numbers are a little low for this outing, it seems like we will be having a bumper turnout for the Christmas Party on November 15th in Birmingham. When I think that the first meetings were only attended by a couple of people, it is amazing how Andy Davie has grown this into the success it is currently enjoying – and I shall be looking forward to seeing all of you on the day.

And finally on the subject of Mr Davie – how fantastic is it that he is now going to be involved in providing debt solutions through his own company. I have met Andy loads of times, in fact I now count him and Bev as close friends (remember the great Kebab race guys!!) and I cannot think of anyone better for confused and troubled debtors to go to to get first hand advice of their options. I absolutely know that Andy will be a great success at this, and look forward to supporting him wherever I can on perhaps the more technical aspects of our work.

That’s it for now – I am going to promise myself to blog more regularly over the next few months, especially having read some of the other inspiring blogs from other posters over the last couple of weeks. You never know – even I might win Blog of the Month one day!!!

Here we are at the start of a new tax year – 2008/2009, and it is hard to believe how quickly the years roll on. It doesn’t seem five minutes since we were planning for Y2K issues in the lead up to the Millenium, and now we are nearly at the end of another decade. For all those forum members who are self-employed it is now time to make sure that you start putting monies into a savings account to meet the next tax bill, and for those who are bankrupt on IPAs and IPOs based upon zero tax codes, this should now be amended via your new PAYE codings.

It is an exciting time in my Philip Gill & Co practice, as we launched our Scottish company Philip Gill & Co (Scotland) Limited on 1 April 2008. I have a new insolvency practitioner starting with me at the end of this month, who has experience of working in practice north of the border, and we already have a few Trust Deed clients and one Liquidation in the pipeline. I am rapidly learning the intricacies of Scottish legislation, and the workings of the various personal insolvency solutions and am sure that we will soon make a significant impact upon that marketplace.

Also an interesting couple of weeks with creditors meetings – I have challlenged a creditor who sought to claim a beneficial interest in a client’s partner’s property – when they had been in their relationship for just seven months, and a modification was put forward demanding a final year equity release from the property! And also we have regrettably had our first IVA rejected this year – where a lady was offering a full and final offer of settlement to creditors from raising her share of the equity in a jointly owned property, but this was turned down on the basis that creditors did not believe that her partner had not shared from the benefit of her borrowings. She is absoutely distraught, but I have referred her to Paul Johns of Reviva who is now helping her with an assisted bankruptcy. Completely unecessary and will result in a much reduced dividend payable to creditors.

I have also held some great meetings with new clients – including forum members Buttercup, Angela 18, Trees and Barbara, and have also talked to a lady who borrowed £25,000 from one of her creditors three years ago, was made to take out a £11,500 PPI policy on top of that, which over 10 years means that she would be paying back nearly £60,000. Having paid for three years she still owes £47,000! It soon became clear that this loan was negotiated over the phone, the PPI policy was not properly explained to her, and she has not signed any written agreement. This goes to demostrate how important it is to consider the implications of this type of lending, particularly in getting and understanding of just how much it is going to cost to repay the loan.

The IVA Council have reared their heads again and despite my getting their public apology and absolute assurance that they would not circulate any more of my clients, I find that three clients have received letters just this week. They are blaming it on their marketing company, but I am now starting to find the whole thing particularly irritating. Let’s hope they get on with this Court case they say they are mounting against the “IVA factories” as soon as possible, which is bound to fail in my opinion even if they can persuade a judge to hear it. Every single one of these people who claims to have had an IVA mis-sold to them has signed on the dotted line, and that is contractually binding – so difficult to see how IPs and their firms are going to be found guilty.

Last Saturday I travelled to Birmingham for the Midlands Frugal Friends meeting in what could only be described as the worst weather ever to hit this area. Windy, and sheeting rain all the way up the M5, and I go absolutely soaked walking from the carpark to the hotel. I must admit I thought that Andy was daft to hold a meeting on a Saturday evening, but the turnout was fantastic and the general consensus from all members was that this night is better than during the week. So more Saturday night venues seem to be the order of the day. I had arranged to provide some food – hot and cold buffet being the order – but what “Fawlty Towers” produced was absolutely astonishing! I have seen better food prepared in an Army field cookhouse in the middle of Salisbury Plain – and it was absolutely embarrassing. Fortunately most of our guests saw the funny side of things, and were absolutely troopers and we did have a giggle afterwards. When I told the Duty Managers I was not prepared to pay for it, he told me not to worry as this happened quite a lot and they were used to it! These events are really starting to gain momentum, and we look forward to attending the next one in Portsmouth in May.

Am going to sign off now as Cardiff City are just about to start their FA Cup Semi-Final against Barnsley. I am not really a football fan, but we feel that we have to give our team some support as they have really done so well this year. Good luck to the Bluebirds!

Another week on, and perhaps the highlight for me (outside of the insolvency world) was to be at the Millenium Stadium on Saturday to see my beloved Welsh Rugby team complete the Grand Slam for the second time in four years! The atmosphere in the stadium was absolutely electric, and the singing was tremendous in traditional Welsh form. It is estimated that over 250,000 people were in Cardiff for the game, which is almost the same amount as our population!

Now turning to the world of insolvency, there has been much comment this week about the effect of the transfer of appointments from Debtmatters to Grant Thornton and Payplan. I have limited personal knowledge of the way Debtmatters was run, or the standard of work carried out, but with both incoming firms taking the step to vary all cases, this leads us to assume that there may be inefficiencies in the old system which need to be dealt with – for the benefit of both debtor and creditors. At at time when our profession is under such scrutiny – particularly with regard to fee income – this attention is less than favourable.

My own view is that more IVA portfolios will be sold, as the larger “factory” based companies will struggle to maintain their cost bases on the very significant drop in fee income imposed by creditors over the last few months. We are all feeling this badly, but the stronger, more specialist firms may be sufficiently capitalised and efficiently run to withstand such pressure. Let’s hope so!

What would be helpful would be if creditors could agree on the basis of fees. I am now seeing at least six different fee structures being imposed by creditor representatives, which often conflict – it is as if the voting representatives are all playing tag with each other and trying to say theirs is better than the others. Can we please get to the stage where we are either going with fixed fees or percentage based realisations? Either is fine in my book – but we have to be paid a reasonable rate for the lower end cases to justify continuing to take them on. This either has to be funded on the basis of agreed fixed costs – or the upper benchmark on fees has to be removed.

A personal triumph this week was to receive a final settlement for poster MikeS from the forum who has been a client of mine since the end of last year. Initially referred to me as an IVA, it soon became apparant that Mike’s interests were best served by the offering of an informal settlement – something that I do not do a lot of, but Mike was such a nice guy (and he brought Jaffa Cakes!) it just felt the right thing to do. One of my colleagues, Hywel Casling, deserves full credit for achieving the settlement, which took some time (as they always do!) to broker – simply because finding a decision maker is not easy when you are offering an informal settlement. Mike sold his family home to enable monies to be made available, but is now happily living with his family in a nice rented property, and is concentrating on building his business back up as he now feels he is directly benefitting from those efforts. Well done to Mike and all others who do not give up hope of eventually getting there!

I cannot believe it is Easter already – it only seems 5 minutes since Christmas, and isn’t it early this year! We have cold weather and snow predicted for the holiday weekend in Wales, so I shall be curling up with some chick-flicks and relaxing – checking the forum occasionally of course. I have a creditors meeting on Good Friday (we take Monday and Tuesday off instead!) for a very special client who is very worried about his position at the moment, so if anyone is reading this over the next few days, please send positive thoughts for him – and especially his wife who is not doing an IVA but is also very worried. If only some of the creditors could see the stress they put some people through, they might think twice about lending the money in the first place – but I guess we do have to measure irresponsibility in borrowing as well as lending.

Looking foward to the Frugal Friends meet in Birmingham in a week or so – it seems that there are going to be a few members there. It will be great to put names to faces, actually meet some of my own clients, and check out whether my thought pictures of some of the regular forum posters bear any resemblance. I feel that I really know Skippy and Aguise so well, as they have been posting on the forum for longer than me, so it should be a good night. And I am contributing to the food and drink – so make sure you bring appetities if you are attending.

My summary is a little late this week, due to having been in Dublin for a long weekend watching my beloved Wales win the Triple Crown. It is a while since I was last in Dublin, and I had quite forgotten what a lovely city it is, and how British it still feels with a very European edge. As I can never leave work alone when I am away, I popped into their version of the Citizen’s Advice Bureau to find that there is practically no debt advisory information at all. Debt solutions are generally worked out with creditors on an informal basis – with no legal protection – and bankruptcy is extremely cumbersome and expensive, with a 12 year discharge period, and whilst there were over 47,000 bankruptcies in the UK in 2005, in the Irish Republic there were only 9! Maybe they are just a little better at paying their creditors over there!

Back at base we have actually had our first rejected IVA for over 6 months, which I am absolutely smarting over as it is a lump sum offer from a good remortgage which is giving creditors nearly 60p in the £ returned within three months. One particular creditor has refused to accept the offer on the basis that her husband’s equity has not been included, however they have not been married that long and the debts were incurred before they were in a relationship. These people are honest and hardworking, and were prepared to increase their exposure to secured lending in order to make a very sensible offer of repayment to their creditors, which is vastly reduced under bankruptcy proceedings. My client will now most likely proceed with the remortgage, and retain the money to hand over to the Trustee once she has petitioned for her bankruptcy, thus resulting in over £6,000 being paid to the government in fees and charges, and perhaps another £8,000 being paid to a Trustee for the task of agreeing and paying creditor claims. Does this actually make any sense to anybody?

I have also been meeting again with many mortgage brokers this week, who are reporting that this is the flattest they have seen the housing and lending markets for a number of years. People coming out of fixed rate deals are being shocked at the level their mortgage payments are going up by, and a client of mine who bought a property two years ago at almost 100% LTV has seen an increase in payments of over £250, and cannot mortgage due to a lack of equity. It is fair to say that most people, including insolvency practitioners, did not see this credit crunch coming two years ago, and creditors simply have to be flexible when it comes to variation applications, from people who continue to strive to repay as much as they can.

This week we have also seen the suggestion that bankruptcy advertsing be stopped – or limited to just the London Gazette, which only sad people like me actually read! I have mixed feelings on this point. Firstly, if we go back to the reasons why bankruptcy was actually publically advertised in the first place then there clearly is no need to draw creditors attention to the fact given our sophisticated modern day communication systems. Secondly, I feel that the majority of people I see actually want to pay their creditors back, and will still feel a stigma about bankruptcy proceedings whether they are advertised or not. I have not read the budget in any great depth today, but my thoughts are that the provisions reported in the Telegraph the other day have been miscontrued, and actually relate to lesser forms of advertising used by IPs such as the payment of dividends and the calling of annual meetings, and in any case such new provisions are not anticipated to be introduced until 2009.

With the storms we have encountered over the last couple of days, it has made me think about the risks people in debt take in being underinsured – for buildings, contents and even life insurance. Have you ever really costed how much it would take to replace every item of furniture, electrical appliance, and item of clothing in your house. According to my husband, replacing my clothing would equate to more than the national debt – but this could easily run into £40,000 or £50,000. Contents and life insurance are relatively cheap, so I would urge all readers to relook at their policies and make sure that you have ample cover – taking advice from an IFA if necessary.

Hope the weather in your area is better than in South Wales, where the fir trees in my garden look as if they are about to fall into my conservatory.

Hi All

Just wanted to say that over the next few months I will be providing a running commentary of interesting things I pick up along my travels as an Insolvency Practitioner in practice. I will try and keep my postings topical and all comments will be based upon my opinions and not necessarily representative of the profession as a whole.

So for this week I found out that leading creditors representative TIX is reporting a 20% reduction in IVAs on last years figures over the last four months. This correlates with the introduction of their new protocol in September 2007, which has now largely been ratified by the joint BBA/BERR IVA protocol which as introduced on 1 February 2008. With bankrutpcy numbers remaining steady, I can only assume that people entering into Debt Management Plans is on on the increase – and a few of the DMP companies I work with have confirmed that they are busier than ever.

A couple of meetings I have had in my office this week with clients has reinforced the need to meet with self-employed clients on a face to face basis, which is actually a requirement under our rules of operation in any case, but one which I feel some Insolvency Practitioners are not abiding by. Self-employed cases bring many complexities, such as the calculation of tax claims, preparation of meaningul trading projections, and simply establishing whether there is a profitable business beind the client. If you are self-employed and your IP says there is no need to meet, I would look for someone who will – as you will need their support over a long time.

We are still seeing rejections from MBNA and Link Financial (who are a company which buys MBNA debt). I have one case at the moment which is at present rejected, but my staff are furiously trying to get additional votes from other creditors to enable this to be accepted. The offer is a good one, and my clients has made it clear that if the IVA is not accepted then she will have no hesitation to declare herself bankrupt. In my practice we never let a client go without a big fight, and we find things like this challenging as they enable us to interact with creditors and understand their reasons for objection. In this particular case, most of the debts are old and have been assigned or are with Debt Collection companies, so we are not dealing with our usual contacts within the creditor representatives.

I am attending a meeting tomorrow convened by a leading Debt Mangement Company who are trying to improve awareness of the operability of DMPs to mortgage brokers in Newport. So it will be interesting to chat to the mortgage industry to see how they feel things are at present and if there is any sign of the markets improving. With many people due to receive stiff increases on their mortgage payments over the next 12 months as they move from fixed to variable rates, we will have to carefully examine how to avoid this when presenting IVA proposals into the future.

That’s all for now, but please look at my blogs regularly as I hope to keep them updated with news and interesting comment.

Hi Everyone,

I would just like to wish you a happy 2008. I have been a bit behind on my blogs but plan to turn over a new leaf this year.
I look forward to sharing my thoughts and opinions on insolvency.

All the best,

Melanie

Following the recent media attention on the large increase in number of IVA’s, and projections for further increases over the next twelve months, the ICAEW have taken steps to ensure that people in financial trouble are getting the right advice.

The ICAEW are presently in discussion with the Department of Trade & Industry and main banks with regard to some of the misinformation presently in the public domain, such as a recent press allegation that IVA’s are not regulated – which is simply not the case.  The ICAEW wish to encourage “proportionate, accepted and industry wide standards” covering appropriate practice in areas such as advertising, reporting and advice to insolvent individuals. 

In addition to ICAEW are intending to upgrade their approach to the monitoring of high volume IVA providers, which are likely to lead to an increased frequency of monitoring visits and a more, indepth review of certain areas such as the quality of advice given.  Forthcoming legislation changes with regard to the proposing of IVA’s will require the IP to confirm in writing the advice provided to an individual before he commences work.  Those individuals will then have to confirm that they have understood the advice and the course of action which is being proposed in order to make a reasoned decision.  This is required to eradicate those firms who only offer one particular solution, and especially where bankruptcy may well be financially advantageous to the debtor compared to an IVA.  One wonders what the banks will make of all of this?

With regard to the marketing and promotion of IVAs, the Office of Fair Trading has recently warned 17 firms providing IVA services, that it considers their adverts and websites potentially mislead customers.  These businesses have been warned to take immediate action to remove or amend a number of potentially misleading statements in order to comply with OFT advertising guidance.  Examples of such statements include:-

• falsely claiming that “up to 90% of your deby may be written off”, when the maximum would be in the region of 60-70%
• falsely implying that they can “guarantee” a favourable outcome by the use of such phrases as “stop all interest and charges”
• failing to state that set up and administrative fees will be required and will be taken out of payments before the creditors will receive any payment
• failing to display the required warnings with the same prominence as the savings required
• failing to state that homeowners may be required to remortage their properties and
• failing to state that entering into an IVA also affects an individual’s credit rating

Clearly anyone thinking about taking advice with regard to their financial difficulties ought to beware firms which advertise in the above manner – and ensure that advice provided by an insolvency practitioner licensed by the ICAEW is presented in writing.  It is widely anticiptated that the other regulatory bodies will shortly follow the ICAEW lead.

When you have recognised that are suffering financial difficulties, and feel there is nowhere to turn, there is now a wealth of firms offering advice as either insolvency practitioners, debt management companies or charitable operations.  Many of these companies operate with extensive marketing budgets, and the media is full of companies offering to assist you to write off substantial portions of your debts.  To the untrained eye, the decision as to which company to instruct can be daunting, in an area where there is yet such a degree of conflicting advice.  If you feel that you are unable to cope with the financial pressure any more, it is usually wise to obtain two or three options in order to find a balanced view.  But what sort of things should you ask an advisor in order to arrive at a decision to instruct them?  I have listed a few pointers which should help.

1  What solutions do you offer?  Most firms specialise in either Individual Voluntary Arrangements (IVA) or Debt Management Plans (DMP).  As such, the advice you receive may well be biased towards the core business of that particular firm, and you may not receive adequate advice as to the advantages of all options available to you.  Make sure the advisor you choose counsels you on the implications, advantages and disadvantages of bankruptcy, IVA’s and DMP.  Beware anyone who tells you what you should do straight away – but favour those who recommend that you have a good think about all options and choose the right solution.  Bear in mind that the wider the options available at each advice firm, the more likely you are to get best advice and choose the right solution.

2  What procedure should I choose?  From your chats with the advisors, does it feel to you that clear ethical procedures are in place and followed by all staff who will be working on your case.  Is the firm able to provide you with feedback from other clients, have they received positive or negative feedback on the iva.co.uk forum, and have they given you the opportunity of a face to face meeting?  Do you generally get a gut feeling that the firm is going to act in your best interests, or are they only interested in taking your money?  Ask your creditors if they have heard of the advisor, and do they have any postive or negative comments to make.  Ask them what their track record success rate is at creditor meeting approvals and successfully completed proposals.

3  At what point will you recommend a solution?  Are they telling you to do an IVA before they have gathered up all of the information from you and conducted a detailed telephone or face to face interview?  You should be wary if they have not fully investigated your personal circumstances prior to providing advice.  Anyone who comes up with a sensible solution in less than half an hour, is probably being motivated by selling you a specific product rather than finding the right solution to suit your circumstances.

4  Do you charge for advice?  You should be wary about paying for advice until you have agreed upon a solution.  Many advisors would prefer to see you paying contributions straight away, even when your proposals are being researched and prepared.  This is a good way of ascertaining whether you can afford the payments prior to formally committing to a repayment plan, however do ensure that your advisor offers you a full money back guarantee in the even that the solution is not acceptable to your creditors, or you change your mind.  After all this money is money which should be held in trust for your creditors at the end of the day.

5  What is the process?  How much work is the advisor actually going to be doing for you?  Will you be left to fill in complicated and lengthy documents on your own?  Will they write to your creditors and deal with queries in the meantime?  Can you ring them at any time for advice?  What is the timescale for completing the work?   Are they going to refer you on to another advisor?

Before you contact the company have a detailed list of your creditors and a household budget showing your income and expenditure (not including unsecured debt repayments) to hand.  Also make up a checklist of questions you wish to ask, and then you can compare the answers in making your final judgement.  Remember you have to work with these guys perhaps for the next five years, so the “marriage” must feel right and you must be assured that they are going to look after your interests as well as the creditors in the long term.

Happy hunting to you all, and don’t forget to use the forum for more specific advice.

One question I frequently get asked by clients is how and IVA or Bankruptcy will affect their credit rating.  This is perfectly understandable, as in dealing with a financial problem, most people want to see their way out of the other side, but what about those people who on the face of it do not have unmanageable debt problems?  What can they do if they are refused credit without explanation?  This can be embarrassing, cause suspicion amoungst partners and family members, and just be extremely inconvenient in our ever increasing “borrow to buy” environment.

If you fall victim of a credit application being refused, you can check your personal file held with any of the three credit reference agencies – Experian, Equifax and Callcredit.  It may be entirely possible that there are false entries on your file – either by mistake or you could be the victim of identity fraud.  A full report of your credit file (on-line) costs between £10 and £15, or £2 if you are prepared to have it posted.  You can also find out how you have “scored” which will indicate the strenth of your application in the eyes of a prospective lender.  This may seem a bit “Big Brother”, but the banks are relying more and more on the sharing of data and it is just as well to know what is being held against your name and address.

In addition to an exceptional report, you can open an account with the agencies which will alert you of any changes to your credit report either by e-mail or SMS as soon as they occur.  This involves the payment of a monthly subscription, and does allow you to access your credit file at any time to check on entries made.  This is a useful and relatively cheap service for individuals who have either been discharged from bankruptcy, or successfully completed IVA’s, to actually monitor their credit repairing over a period of time.

Your credit file will include details of County Court Judgements, IVA’s, bankruptcies and also open credit agreements and bank overdrafts.  It is perhaps odd, in these days of credit being freely available, that a note of too many credit checks by lenders may give out negative signs as to your creditworthiness.  This should be especially noted by parties who frequently shop around for the best interest rate, as this is likely to result in several entries against your name which can ultimately affect your application.

In the unfortunate event that you do find entries which are incorrect on your credit file then you should write to the agency concerned and advise them of your position.  You may well need to provide evidence – for instance if a debt has been repaid, or an IVA concluded – and this will either be posted onto your file or the adverse entry will be removed.  In the event that your file has been tainted by a family member’s record living at your address, then you can submit a Notice of Disassociation – which has the effect of removing any link to you and the defaulter.

I just don’t know what has happened to the banks since I returned to the office following the Christmas break – but the season of goodwill to all men is definately over.  Having been heavily involved in the IVA marketplace since the late 1990’s, I really thought a certain custom and practice had been established between Insolvency Practitioners and creditors as to reasonable and allowable expenditure, but to be told today by a major voting representative, who will remain nameless (but who are also a major proposer of IVA’s) that the expenditure quoted in a proposal I had put forward was “ridiculous”, I feel the need to put fingers to keyboard in protest!

Personally, I have never been a fan of standard expenditure allowances.  Not everybody fits the same picture, and little allowance can therefore be made for individual circumstances.  In my practice we spend a lot of time with clients exploring what they actually spend, and understanding the reasons for that expenditure, and of course we verify the amounts by examining contracts, bills and bank statements.  Of course this does not give debtors carte blanche to provide for a three week cruise holiday or shopping at Prada, but it seems to me that institutions who are freely lending money, with limited credit checking or further investigation into their customers’ financial circumstances, are becoming increasingly harsh in their view of what expenditure should be allowable when things go wrong.  Last week I had one creditor’s representative telling me that £20 per week was the maximum allowed for a single person to feed and clothe themselves.  When I asked this person if he felt that he could manage on such a frugal budget he admitted honestly that he could not, but then still toed the party line with regard to his firm’s expenditure matrix.

The latest benchmark to hit the insolvency marketplace is the British Bankers Association’s Common Financial Statement currently being relied upon by a number of major banks.  The research into this document was carried out in the early 2000s, and was finalised in 2005.  In principal I have no problem in the BBA, on behalf of its members setting benchmarks, but these must be realistic and be reviewed in line with inflation and other factors such as the recent increases we are experiencing in car fuel and domestic power.  Even the voting representatives who have been instructed by their clients to use this matrix admit that the allowances are often unreasonable. I urge the BBA to consult with their clients and Insolvency Practitioners alike – which has already started within the newly formed Debt Resolution Forum to review this statement in order that we can make IVA’s workable in the long-term.

Just this week I have had two clients pull out of very realistic and workable IVA proposals because creditors have demanded unfair increases in contributions which they honestly could not afford.  As my firm does not charge any fees until an IVA is accepted, I have had to write off a substantial amount of time which I will not now be paid for, and my clients are now in the process of petitioning for bankruptcy which will result in a zero return not only for the rejecting creditor but all of the others who had faithfully supported the proposals.  Is this really what the banks want to see?  I fear there will be many more instances of this over forthcoming months and Insolvency Practitioners will refuse to take cases on leaving us with the only options of bankruptcy or Debt Management.  At a time when the Government are really trying to support the IVA as a more favourable option to an unregulated DMP, we seem to be taking one step forward and two backward.  In addition, we will see IVA clients accepting unfair increases in contributions simply because they want to get away from mounting debt pressure, to later fail because they cannot afford the repayments.  Note that the Common Financial Statement allows nothing for contingencies, and my predictions are likely to be ever accurate.

The cynic in me wonders if these practices actually serve to encourage proper and accurate reporting by Insolvency Practitioners within proposal documents, or whether it encourages abuse and false declarations.  I would like to believe that this is not the case, and I certainly will not change the way I present – after all it is the debtor’s proposal and therefore their right to put forward their financial circumstances as they are.  The next few months will be interesting, and I shall await end of year statistics to see whether there are a substantial number of IVA’s rejected at creditors meetings to be followed by bankruptcy petitions.  If this is the case, the banks will be facing an even bigger write-off, at a time when the IVA was really starting to prove itself as a reliable method of repayment for the insolvent debtor.