In a move that will likely go down as one of the most short-sighted in UK debt management history, Insolvency Practitioners have missed the boat on protecting income by not speaking up early enough about unfair and unreasonable creditor behaviour and losing control over the fees charged in Individual Voluntary Arrangements.

Creditors have been very successful in using the same techniques perfected in the United States to controlling Consumer Credit Counselling group income and moved those learned skills to the UK to go after IPs.

The debt management participants have never been very forceful or powerful in speaking out about creditors control since many of the players earn money by providing services to creditors. They don't want to upset the apple cart and irritate the very sources of their income.

Even Insolvency Practitioners have been reticent in speaking out for fear that their IVA proposals will be rejected or they will be blacklisted and that will negatively impact their income.

When IPs Lose, So Do Consumers

The tragedy in this situation is that as creditors, like Capital One, are successful in dictating what licensed and regulated insolvency practitioners may charge for providing Individual Voluntary Arrangement services,  then IPs will have to reduce the quality resources or time they spend with consumers in order to do more with less income. These changes lead to less consumer representation and assistance in putting forward repayment solutions to avoid bankruptcy.

Ultimately by not being better organised and speaking with one authoritative voice in the past, Insolvency Practitioners have allowed themselves to watch nearly half of their income vanish in less than a year. And while I almost hate to write this next statement, I did warn you that this was going to be the outcome. Ironically, when this outcome was brought up as a reality in the United States and in the United Kingdom, debt management providers have almost always said, "You're crazy, that will never happen here." And yet it does, every time. As long as creditors are paying the bills, they will call the shots. This is why consumers will always be better represented when they pay for the professional services they receive rather than rely upon the creditor free lunch.

So what do Insolvency Practitioners need to do to best represent consumers and their profession? The answer is simple; they need to speak out against the unfair and unreasonable actions of creditors, speak out about arbitrary hurdle rates imposed by creditors that lead to the rejection of valid repayment offers and the needless bankruptcy of consumers, and be better represented by a vocal professional organisation that will publicly defend the good work that Insolvency Practitioners do.