Opening a consultation period running over the next three months, the Insolvency Service has proposed arrangements should in future only need a majority vote to be set up, creditors should have to file their claims within 90 days and will no longer have the power to change the debtor’s proposals.
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There are also plans to cut the amount of paperwork, reducing the administrative burden on insolvency practitioners and the cost to consumers.
However, many in the industry have concerns over making IVAs easier to obtain.
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Simon Biddle, head of marketing and communications at Infinity Mortgages, said: “There were as many IVAs in Q1 2007 as there were in the whole of 2006, so I would question the need for further criteria simplification.”
Richard Fox, chief executive of the Society of Mortgage Professionals, said: “A lot of people are getting concerned as numbers are climbing to astronomical levels and if there is a further tightening of credit then you have to worry for the future. You see people who are taking IVAs as a soft option to get out of their debts and there needs to be a clampdown on this. However, any changes will be resisted and challenged by Human Rights laws.”
