IVAs could become more transparent and simpler
October 11, 2008
The IVA process could become more transparent and simpler for consumers in high levels of debt, and this is as the result of a new protocol that has been drawn up by the Insolvency Service with the help of debt agencies, consumers groups, and creditors. IVAs, or Individual Voluntary Arrangements, have become more popular over the past couple of years, as glossy advertisements on television and radio have raised consumer awareness about this method of debt management.
Consumers entering into IVAs in the past have often not realised the dangers as well as the benefits of this course of action, and some companies have been accused of misleading consumers by failing to explain the risks. It is hoped that the new protocol will means that the ins and outs of IVAs, which are known as a softer alternative to bankruptcy, will become clearer for consumers to understand.
Following the launch of the new protocol, which has resulted from an amnesty between creditors and IVA or debt agencies, the Insolvency Service stated: “The Insolvency Service has facilitated a process which has successfully produced a voluntary code for IVAs to reflect the changing needs of the market. It will provide greater transparency for creditors and debtors alike by using standard clauses and a consistent format. Today’s protocol is a significant achievement for everyone involved.”
Other industry sectors have also welcomed the move, and one official from the British Banker’s Association stated: “The BBA, the Insolvency Service and the participating IVA providers are united in support for this agreement, which should provide customers with the reassurances they need in order to make the right choice for their financial futures.”
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