In an effort to listen to what Insolvency Practitioners were actually thinking and feeling about the TIX mandated IVA changes, I did a national poll yesterday.

On 14 August 2007 I sent an email invitation to about 1,100 Insolvency Practitioners to take an online anonymous IVA survey. Within seven hours I received 117 responses and here are the results. (I have included the raw data below as an attachment to this article)

I think you will find, from reviewing the responses and comments that Insolvency Practitioners have grave concerns and outrage about the IVA changes that TIX and its clients, HSBC, Royal Bank of Scotland, Marks & Spencer Money, First Direct, and Halifax/Bank of Scotland want to force on consumers to limit debt help available to consumers that need it most. 

If these Insolvency Exchange changes are allowed to be put in place without a knock down, drag out fight by IP trade bodies like R3, Insolvency Practitioners Association (IPA), Institute of Chartered Accountants in England and Wales (ICAEW), The Law Society (LS), and The Chartered Association of Certified Accountants (ACCA) it will clearly be against the express will and desire of the very licensed and regulated Insolvency Practitioner members that are best trained to put forward a fair, balanced and sustainable IVA debt solution into place. Knock, knock. Your membership wants you to take action.

"TIX is nothing more than a cartel which promotes an anti-competitive stance within the profession. They are trying to circumnavigate the legal system to promote their own posturing to their financial institution clients. They should be brought to book and debarred from holding any office within the legal or accounting profession. An example needs to be made of them." - IP Comment 10, see below.
If I was an IP and member of one of those trade groups that took my money for membership and is not fighting back hard to support Insolvency Practitioners and consumers, I would make sure that the current officers of those groups were removed. But hey, that's just my opinion, and one probably shared with the 74% of IPs that said their trade groups were not doing a good job representing them.

I think the responses are a very good representative sample of all Insolvency Practitioners and demonstrate a strong and consistent opinion across the profession. When 89% of consumer Insolvency Practitioners say the "TIX Compliant IVA" demands from creditors are not in the best interest of consumers or troubled debtors, we need to pay attention.

It important for the public to understand that Insolvency Practitioners consist of accountants and lawyers that have had to undergo extensive education, experience and exam process to best represent consumers and creditors. These are experienced professionals that need to be valued and listened to by the government, elected officials, and trade bodies. And one very clear message from these professionals is that these changes will limit consumer access to IVAs and cause some IPs to go out of business (see IP Comment 28) or no longer offer Individual Voluntary Arrangements to consumers.

These creditor mandated and unilaterally demanded changes through their agent, the Insolvency Exchange (a commercial company), only serve the interests of the TIX creditor clients (See IP Comment 14 below) and unfairly limit access to consumers to the effective and humane debt solution of the IVA. These creditor forced changes by HSBC, Royal Bank of Scotland, Marks & Spencer Money, First Direct, and Halifax/Bank of Scotland undermine the fairness and balance that the Insolvency Service and licensed and regulated IPs have worked so hard to achieve to best represent consumers and all creditors in a fair and reasonable way.

The TIX Compliant IVA demands certainly appear to be little more than the heavy-handed corporate greed of the banks and credit card companies in their desire to inflict pain and impose their profit making will over all consumers by preventing licensed and regulated Insolvency Practitioners from being allowed to create a balanced and level playing field with the IVA that allows debtors to be professionally represented to fairly and reasonably repay their debts in troubled times.

Myvesta UK - Insolvency Practitioner / IVA Survey

Question 1. Are you aware of the changes proposed by The Insolvency Exchange and its implementation of the "TIX Compliant IVA" that limit IP nominee fees to the first 4 or 5 monthly payments, limit supervisor fees to 15% of payments as they are collected by IPs, require IPs to distribute dividends monthly by BACS, and currently retain hurdle rates that prevent some consumers from accessing the IVA as a valid solution to debt problems?

97% said they were aware of the changes.

Question 2. What is your opinion of the following statement? Please read it carefully. "As an Insolvency Practitioner I feel the "TIX Compliant IVA" is good for consumers and people with problem debt."

89% Disagreed or strongly disagreed.

Question 3.  What is your opinion of the following statement? Please read it carefully.  "As an Insolvency Practitioner I feel the "TIX Compliant IVA" is good for Insolvency Practitioners and the IP profession."

95% Disagreed or strongly disagreed.

Question 4. Under the new "TIX Compliant IVA" that will limit your nominee fee to no more than the first 4 or 5 monthly payments, at what monthly payment will it become not cost effective for you to take on new clients? For example, a monthly payment of £100 would limit your total nominee fee to £400-£500.

70% of respondents said that the minimum monthly payment they would assist debtors with was £300 per month. 30% of responding Insolvency Practitioners said the monthly payment would have to be £500 or more per month otherwise it would not be cost effective to help consumers.

Question 5. As a member of a trade body that represents Insolvency Practitioners, are you satisfied with the support they have given to IPs to voice concern about the "TIX Compliant IVA" changes?

74% said no, they were not satisfied with the response from groups like R3 and the IPA. I doubt members will forget this at re-election or dues paying time.

Question 6. As an Insolvency Practitioner have you been afraid to publicly voice your concerns over the "TIX Compliant IVA" changes for fear it will somehow negatively impact you or your clients?

43% of Insolvency Practitioners said they were afraid to speak out publicaly.

Question 7.  Do you feel the Insolvency Service should allow the "TIX Compliant IVA" changes to go forward that limit consumer access to the IVA?

90% of licensed and regulated Insolvency Practitioners that responded to the Myvesta survey said NO, the Insolvency Service should not allow these changes to go forward.

The results are pretty clear.

If these changes are allowed to be pushed ahead by TIX and their creditor clients then the result will be a UK insolvency approach that is not good for consumers or Insolvency Practitioners and excludes consumers from debt solutions because of the higher monthly payments and hurdle rates. What public good is there in these policies and how does it not harm the public at large? Why are we allowing a few creditors to destroy an entire insolvency approach that has been the pride of the United Kingdom for many years?

As part of the survey I asked Insolvency Practitioners the following question and received some very insightful responses. The question was “If you have any additional feedback that you would like for the IP trade bodies, the Insolvency Service or consumers to know about the "TIX Compliant IVA" changes, please enter your anonymous comments in the box below. “

While not every participant in the survey answered the question, many did. Here are some of the many responses IVA providers, Insolvency Practitioners, shared.

IP Comment 1. I think this will increase the number of bankruptcies, as I have advised many debtors to strongly consider bankruptcy. Hopefully this will hit the pockets of the banks concerned by getting 0p/£. The Nominee has a duty to both the debtor and the creditor. TIX wants us to have a duty of care to their client only. Also, if our fees are reduced to such a level, are the regulators going to relax the compliance work required?

IP Comment 2. I want the freedom to advise a debtor on their "debtors proposal" and offer them a real choice. The TiX proposal results in debtors being shoehorned into an inappropriate "creditors proposal".

IP Comment 3. The banks appear to have simply passed control of problem debts to an agent and are not considering the position of their customers on an individual basis. The use of hurdles rates implies that no consideration is given to the individual circumstances. Further to limit the level of fees simply invites sub-standard advice to be given by unqualified and unregulated debt advisors. The insolvency profession as a whole is seeking to improve standards and the quality of advice given. Limiting fees to an unrealistic level will prevent or deter IP's offering advice to those who need it.

IP Comment 4. This is a backward step for the profession and less than helpful to debtors. It's little more than a debt management scheme for creditors but with the IP still having to carry out all the functions of a Supervisor while not being paid for doing so. In my view it will be the death of the consumer IVA.

IP Comment 5. TIX's 'clients' are the worst at updating their records when an IVA is approved - continuing to try to collect debts for months after the IVA goes through. This adds to costs as we try to get the likes of HBOS to stop hassling debtors - on one case, we have spent over 4 hours trying to get HBOS to stop contacting our client over 4 months - without success. So, our fees are high because of TIX's and their client's inefficiency

IP Comment 6. I have taken the decision, in the light of increasing pressures on fees that, I will no longer take on consumer debt IVAs. I now refer such cases to IVA factories that are better set up to deal with volumes of cases thereby taking advantages of the economies of scale. This does of course for example leave the elderly debtor that might need a more personal service with much less choice.

IP Comment 7. I believe that the TIX compliant IVA is an attempt by creditors to re-write the legislation to meet their needs - multiplying the power of their individual debts

IP Comment 8. As I understand it, the TiX compliant IVA is basically the IVA Forum's proposal plus a bit extra - as far as terms are concerned - and then with their new fee 'structure'. Standardization of IVA proposals and an agreed protocol is a good thing and I have supported the work of the IVA forum. It is the fee structure and quantum being imposed by TiX and their clients that will do harm to the IVA profession and will be the direct cause of exclusion of many individuals with debt problems from the full range of debt solutions that they should be able to access. I dread to think what the less scrupulous people in the debt industry will come up with in terms of new 'practices and procedures' to mitigate the cut in fees. As far as trade bodies are concerned, I expressed my concerns in detail to both the Insolvency Service and R3 within a day or so of TiX's pronouncement on fees.

IP Comment 9. I believe it is very difficult (wrong) to generalise over all IVAs. The sole trader continuing to trade a business (sometimes quite sizeable) is a very different proposition to someone who has just over spent. The more there are rules the less IP's are able to help the non-consumer IVA. We are professionals and not a factory - we consider each individual and their problem carefully.

IP Comment 10. TIX is nothing more than a cartel which promotes an anti-competitive stance within the profession. They are trying to circumnavigate the legal system to promote their own posturing to their financial institution clients. They should be brought to book and debarred from holding any office within the legal or accounting profession. An example needs to be made of them.

IP Comment 11. TIX and the creditors they represent seem to either not know or have forgotten that IP's are the only profession fully qualified to advise on debt issues. That level of qualification & regulation comes at a cost to each IP which like all other professions ie solicitors/accountants is passed on to the client. IP's are more than willing to set realistic fee levels. Do they want sustainable IVAs?

IP Comment 12. One size does NOT fit all. Trying to screw IPs over their fees for IVAs will only lead to corner-cutting and lowering of standards. Each case should be considered on its own merits. Perhaps guidelines would be helpful (as issued by the HMRC's VA Service) but arbitrary criteria apparently based on nothing more than a desire to drive down prices can only be counter-productive to all concerned - IPs, creditors and debtors: pay peanuts, get monkeys!

IP Comment 13. If the IP trade bodies (particularly R3 (who it could be argued is superfluous to requirements) are to survive, they have to restore their members confidence that they are a credible entity to fight on their members behalf. At the present, ICAEW, IPA & R3 have been woeful in their response to TIX. Only Bill Burch & yourself has to date been radical enough to take on the banks (who lets face it have been the cause of the debt problem in this country, by inappropriate and immoral lending). The IP trade bodies instead of trying to act by way of referendum need to just get on with it. Many of their members are actually going to go out of business due to these proposals. They shouldn't need to go back to their members at this stage; they need to lead their members; present a policy and follow it through.

IP Comment 14. I am concerned that TIX are seeking to impose these terms / standard modifications without having obtained agreement and consensus from all the financial institutions and stakeholders. I am personally aware that some of TIX's expected terms are contrary to the historic and stated voting positions of other creditors e.g. concerning fees, timing of distributions etc. Whilst I appreciate that it may simplify matters TIX, however, whilstever there is no consensus a 'standardisation strategy' is a waste of effort and time on everyone's part and does not in any way reduce costs or processing time as IPs will still have to attempt to obtain agreement from parties with differing views and criteria. TIX say that they intend to implement these terms for VAs where they hold votes of greater than 25%. There may well be cases where other creditors and their representatives hold equal or even greater voting power and may not agree to TIX's terms. How would the system work in terms of TIX voting in such cases? Indeed we may well see the situation where other representative organisations circularise IPs with their own expected 'standard IVAs'. What would we be expected to do then?

IP Comment 15. It has been brought to my attention that TDX Group are known as "debt exchange - vulture traders". They act on behalf of the banks in selling on their debts. This is their principal business. I am informed they also act for the same banks that TIX represent and are in the same group. With this in mind, it puts TIX in a completely different light. Clearly, the whole purpose of what they are doing is to increase the price (and their commission) for sale of debts where IVA's have been approved - all at the expense of the debtor and the insolvency practitioners!

IP Comment 16. Many of the staff at TIX are not insolvency trained and have requested illegal modifications and made unreasonable suggestions. Small practices will suffer considerably and not be able to comply especially with monthly payments by BACS which substantially increase costs for which we are not allowed to charge. There is an insinuation that IPs do not know what they are doing and are not allowed to treat people as individuals. They do not read proposals to establish different peoples circumstances which invariably means adjourning creditors meetings involving more costs which again we cannot charge for

IP Comment 17. I have found that TIX staff do not always understand the IVA proposals they receive and they come back with bizarre and unreasonable comments and modifications. They do not always appear to act in the best interests of their clients. I am not convinced that they should be in a position to dictate, or even suggest, how IVAs should be put together.

IP Comment 18. I can see more Bankruptcies given the profession will not be able to financially assist with them. Maybe the Government should consider the impact this will have on the insolvency service especially when one considers it's present efficiency.

IP Comment 19. Every IVA is unique and a "one size fits all" is not the right way to deal with individuals in this position.

IP Comment 20. I would have thought these proposals should be referred to the OFT/Monopolies Commission as being in restraint of trade and/or anti competitive.

IP Comment 21. As an IP who undertakes a limited amount of personal work I am now considering very carefully whether or not IVAs are going to be undertaken by the firm. We now have to consider who represents each creditor, what each creditor's representative requires in terms of each proposal ( these often differ depending on the creditor). Quite honestly I feel they are more trouble than they are worth in many cases and with the boundaries seemingly changing it is difficult to advise clients particularly when often it is the most difficult decision they have ever made i.e. Bankruptcy v IVA. Unless you are set up to 'sausage machine' these through in any quantity then I see IVAs as being another avenue of work that is being gradually eroded from me.

IP Comment 22. Many IPs feel the trade bodies, largely dominated by large firms not interested in IVAs, simply do have enough interest to take a proper role in matters.

IP Comment 23. The TiX proposals appear to be contrary to the spirit of IVA's. They impose how we do our work, what we get paid, who can propose an IVA - all without considering what is the best solution for that particular problem. This seems to be a debt management plan with a five year cut-off, which in due course will mean that as far as IVA's are concerned, they will be carried out by debt management companies rather than IP's. Much of what the TiX new requirements impose leads me to believe that this is the end of IVA work. Further, isn’t this just a way of getting rid of IP's? The combination of the TiX  requirements and the introduction of lower qualified people being allowed to do IVA's will mean that IVA's will become the domain of DMC's. Is that what was envisaged by the IA'86? ie. low quality, low image, bank lacky's? with the OR's taking work in-house and the impact of TiX, the small IP firms will become a thing of the past. There work is now being limited to corporate, and how long before the CVL is replaced by compulsory liquidations. Last small firm IP left, please switch off the lights.

IP Comment 24. I believe the banks reasoning behind this is that they fear we are generating a society who believe that when they incur debts, they will only be responsible for paying back a fraction of what they owe. This can not be the case NOW as all my debtors have incurred debts over significant periods of time. They can hardly have engineered the position they find themselves in. What might happen in the future is that a few individuals will endeavor to rack up large amounts of debt with the intention of only paying a fraction back however that is surely for the banks to stop by employing a more conscientious lending policy. TIX seem to be lumping all IP's together as if we all deal with IVA's like the "factories". We offer our clients a bespoke personal service. We charge our fees based on a very simple fee structure. I.e. £1000 per annum plus £1000 if there is a house to be dealt with. Its got nothing to do with the total assets realised as collecting a payment of £300 for 5 years is the same as collecting £3000 for 5 years. I really don’t believe TIX and the banks understand the level of pressure our clients are under. They seem to have forgotten that they are individuals with real lives who feel desperate to resolve their problems. To take away the IVA as a solution leaves them with a twenty year DMP or bankruptcy. This is absolute madness. Everyone is complaining about it but there does not appear to be a common voice. We went to the DRF meetings but decided not to become a member as it was mainly for DMC and IVA companies who have DMC's. It focused on the "best advice" at the call centre stage. We don’t have a call centre and do not undertake any direct marketing. I very much appreciate someone taking the time to pull us IPs together. Considering we are allegedly a bunch of professionals who have all worked their socks off to get their licenses, I can’t believe that all we have achieved so far is to sit around moaning whilst contemplating our navels.

IP Comment 25. It would not be financially viable for my firm to consider any IVAs where the monthly payment was under £500 per month. My firm currently takes on around 200 to 250 IVAs a year and I would say at least 75% of those pay less than £500/month. The "TIX Compliant IVA" would therefore have a seriously detrimental effect on this practice. Ultimately you could say that if the changes are implemented it will almost certainly result in staff redundancies. Is this what R3, The Insolvency Service and the Banks really want???!!!! I hope not.

IP Comment 26. How can an unregulated organisation try to control IP's who are clearly qualified and regulated?

IP Comment 27. I feel that most of the insolvency world has not noticed this as it only affects a small portion of practitioners who specialise in this area most do corporate work and believe that they are ok, but this is just the first step to attacking all fees and limiting all debtors choice of practitioners. Also some may feel that their trade body is irrelevant for this issue as they are run by corporate IP's with little or no interest in the IVA market and so feel it would be a waste of time seeking their help.

IP Comment 28. If the TIX compliant IVA changes become standard then I may as well make all of my staff redundant and go home now.

IP Comment 29. The TIX approach will limit the number of LIPs who remain active in the IVA arena and this will lead to more missing of IVAs and DMPs. There should be urgent studies/research in to the success rates of DMPs and IVAs and consumer satisfaction with these compared to consumers who have gone bankrupt and in all cases the credit rating repair experience. The TIX model does not take account of traders who have funded the business on credit cards. There is a danger of IVAs offering the debtors no benefit for putting himself out to make a higher return to creditors and consumers voting with their feet by filing for bankruptcy and consequently banks having to write off even more money.

IP Comment 30. The TIX compliant IVA is an attempt to decimate the IVA market by the TIX lending institutions driven by HSBC. It is anti competitive and severely detrimental to both the insolvency profession and ultimately the end user of the solution the debtor. The stance taken by TIX will limit the availability of the solution to the people with lower disposable incomes, as you have quite rightly highlighted in your articles, there is a cost to advice and TIX have in no way considered the costs associated with setting up an IVA thus penalising those in this situation. The trade bodies have historically spent more time on the corporate and turnaround side of the industry perhaps as this is a more palatable way to promote the industry, however I do feel that this is why IP's have not turned to the trade bodies for support.

IP Comment 31. Perhaps the banks and lenders should adopt similar stringent "hurdles" within their lending criteria (based upon affordability), to prevent individuals becoming overburdened with debt in the first place, rather than falling over themselves to lend as much as they can!

IP Comment 32. The policy adopted by TIX is against the enterprise and rescue culture that is enshrined in legislation. It appears to be a deliberate attempt to exclude a certain proportion of debtors from being in a position to put forward proposals for an IVA. I would strongly recommend that the Government takes appropriate action against the banks that are driving this policy.

IP Comment 33. It will force debtors to have no choice between bankruptcy and inappropriate debt management. It expects IPs to perform highly regulated work at non-regulated fees.

IP Comment 34. I get the impression that Tix are trying to make the IVA become more like debt management, but with lower fees and more conditions. You can tell that they are from a debt management background. A lot of IP's do not have the facilities set up to run an IVA with debt management style monthly distributions to creditors. This is another expense which will have to be taken on. I heard that Tix want to check that IP's are compliant with their system, but isn't this the job of the governing body who issue the IP licenses. I do not see this as ethical, as they represent creditors and their is the data protection act to follow? I do think that Tix are moving closer to doing all the IVA's themselves. Is this compliance thing just a way of information gathering so that they can set up themselves. I strongly urge all IP's not to allow Tix to do compliance checks.

IP Comment 35. Restriction on fees, dividend rates or any other types of arbitrary hurdles should have no place in the arena of addressing the financial plight faced by tens of thousands of people in this country. Despite the problems created by sheer volume each case should still be dealt with on its own merits. The IP trade bodies should be making that crystal clear to the creditors.

IP Comment 36. Banks and lending institutions who support the TIX initiative should remember that IP's have not created the consumer credit boom and have not created the culture of irresponsible lending. IP's try and secure the best possible arrangement in the interests of both the debtor and the creditor and are effectively assisting the lenders to recover monies which would otherwise be lost if the debtor were to be made bankrupt. I see no reason for IP's to "share the risk" with the lenders.

IP Comment 37. The TIX is detrimental to the consumer as it will limit their freedom of choice of IP. It will be detrimental to IPs, as it reduces the cost but involves more work, therefore will not be viable to do.

IP Comment 38. Requirement to make monthly payments ignores time it can take to get Inland Revenue approval. Monthly distributions would require monthly dividend declarations. Only IVA factories would have software to comply. Fee structure does not reflect complexity. Later comment they raise suggests easier to get changes through without creditor involvement, but does not explain how given existing legislation.

IP Comment 39. The TIX circulars amount to an interference into my professional expertise and a restraint of my trade.

IP Comment 40. I think the biggest issue is that the bank's should be careful of what they wish for. As a small practice I think current advice would be in most circumstance don't consider an IVA, bankruptcy is a better option!

IP Comment 41. This is the banks suddenly deciding to limit professional fees without our ability to limit the cost of using banks

IP Comment 42. I was under the impression that price and/or term fixing by a group of individuals or entities was illegal and contrary to public policy.

IP Comment 43. Why don't creditors and their agents get together with R3 and target problem IVA providers giving poor advice rather than this ill judged, poorly thought out, indiscriminate maverick approach?

IP Comment 44. It is always up to creditors to reject an IVA (IPs must remember this), and it is easier and more efficient for us to deal with a small number of representatives whom we know and have guidelines we can work to. It has been this way for the 19 years I have been working in insolvency. TiX have some good ideas (the way of dealing with equity etc), but monthly dividends are not cost effective to small IPs and most creditors, and restricting fees restricts entry. They are trying to produce a 'pile them high, sell them cheap' mentality. An IVA is like a gourmet pizza not a cheese on toast with tomato sauce! This is how mistakes are made, and that too does not help creditors or debtors. The main work comes in at the beginning (and if fees are cut to below about £1250 plus VAT corners will be cut) and there is more likelihood of a problem later in the IVA. Given the new wave of IP-lite coming in, they will not be able to cope.

IP Comment 45. The proposed reduction in fees if properly thought through does not benefit any stakeholders, the consumer will not be provided with the best advice for them, IVAs will be failed earlier than is currently the case as the costs in trying to resolve any issues that may arise (default) may not be cost effective for them to resolve. Lenders should lend more responsibly rather than recouping their losses by reducing proper professional costs. IP trade bodies are also changing the standards set over the years by no longer requiring the debtor to be seen by the IP. IVA factories are difficult to monitor and provide advice by telephone which is not put into writing and therefore transparency and quality become an issue. I am aware of inappropriate IVAs being agreed for debtors on benefits and also one being told that they do not deal with third party lump sum IVAs. What ability do the IP trade bodies and the Insolvency Service have in monitoring the performance and removing licenses from the IVA factories?

IP Comment 46. I think it disgraceful that TIX can try to curtail IP fees. Are TIX curtailed for what they do? In a IVA where, say, £300 per month is paid into the IVA over five years, this equates to £40 per month for al Supervisory fees, including VAT. IVAs simply cannot be run for that - especially when TIX want IPs to set up BACS payments as well which are very expensive to administer.

IP Comment 47. I am very concerned about the conflict of interest TiX has - when their parent is a debt-collection agency and they are quite obviously looking to increase their market share on the back of failed IVA proposals. I have no objection to creditor representation, but this company is staffed with inexperienced, lowly paid individuals who clearly do not not understand insolvency procedures or best practice. My staff constantly have to call them to advise them that they have not read our proposals properly which is time consuming and embarrassing for TDX. It cannot be right for one firm to dominate the creditor voting market, when there is a clear conflict of interest. The proposed fee reductions will cause good insolvency practitioners to exit the marketplace leaving only the factories to continue to offer a poor service to consumers, as they will be underesourced to cope with the additional work this ridiculous protocol entails.


My favorite quote from the ones above has to be “Considering we are allegedly a bunch of professionals who have all worked their socks off to get their licenses, I can’t believe that all we have achieved so far is to sit around moaning whilst contemplating our navels.”

It made me smile.

P.S. If you have not done so already, voice your opinion to protect consumers from these unfriendly changes by casting your vote in the 10 Downing Street online petition or contact your MP and let them hear how you feel about this issue. Better yet, start contacting the press and tell them how you feel about what is going on here. And if you've got some extra time, do it all.