This past weekend Myvesta conducted a survey of Insolvency Practitioners that deliver Individual Voluntary Arrangement (IVA) services in England. Respondents from Scotland or who did not deliver personal insolvency services have been filtered out.

Question 1. Do you feel you can agree to the TIX Compliant IVA proposal guidelines without risk to your license or regulatory ramifications? 94% of respondents felt that they could not agree to the guideline without risk.

Question 2. How do you plan to deal with the start date of the TIX Compliant IVAs?
72% - “I plan to submit my regular IVA proposal with the fees I feel is fair for the work I do even though I know that TIX may reject them.”
20% - “I plan to inform TIX that I cannot legally agree to their terms until guidance is made available by regulatory and/or legal bodies regarding my liability.”
7% - “I plan to not submit IVA proposals to TIX that do not meet their guidelines.”

Question 3. Please check all responses that apply. If you submit an IVA proposal to TIX and it is rejected because it is not in compliance with their mandated fee schedule, how will you deal with the rejections?
34% - Submit a complaint to the Insolvency Service
31% - Submit a complaint to R3
23% - Submit a complaint to the Financial Ombudsman Service
10% - None of the following suggestions
3% - Do nothing.

Question 4. If you have said that you can’t or won’t submit TIX compliant IVA proposals what will you advise those consumers to do?
70% - Bankruptcy
14% - Debt Management Plan
9% - Do nothing
7% - Token payments

Question 5. Would you be willing to agree to a supervisor fee of 15% of the monthly payment if the nominee fee was the following minimum amount?
£2,500 – 24%
£2,250 – 0%
£2,000 – 26%
£1,750 – 2%
£1,500 – 4%
£1,250 – 0%
An amount equal to 4 or 5 times the monthly payment as suggested by TIX – 0%
None of the above – 43%

Question 6. If the nominee fee was an acceptable amount for you would you be willing to accept a monthly supervisor fee of 15% of the monthly payment or would you need to have a minimum monthly supervisor amount?
No minimum amount needed – 19%
£60 per month minimum – 17%
£55 per month minimum – 2%
£50 per month minimum – 13%
£45 per month minimum – 0%
£40 per month minimum – 0%
None of the above – 50%

Of all the responses the two questions that have the most far reaching consequences to TIX and its creditor clients are question 3 & 4. In question 3, if Insolvency Practitioners instruct or assist people that are no longer eligible for an IVA and their rejected IVA clients to file a complaint with the Financial Ombudsman Service, it could have far reaching financial consequences for creditors.

In question 4, creditors could be driving consumers faster to lower or no returns with the implementation of the TIX Compliant IVA. With 86% of IPs saying that they would recommend bankruptcy or other similar low return options, it seems like the bankruptcy rate should increase when these policies are implemented.  If creditors were hoping that more debtors landed in Debt Management Plans, IPs are saying they would only suggest that only 14% of the time.