I would agree that for someone to be a debt avoider there has to be, to a significant degree, an element of pre-meditation or mal-intent. The overwhelming majority of debtors do not fit that description, most of them having got themselves into a hole, possibly with some assistance, from which they cannot escape.
The root of the problem is that none of the legislation under which we operate was designed to cope with large numbers of insolvent consumers. Neither the Insolvency Service nor the Insolvency Profession have historically carried the necessary staff numbers to cope with such demand. The most recent legislation (the Enterprise Act 2002) was designed to "promote entrepreneurs" as is the current measure (the rationale is repeated almost word for word in fact). Consumer debtors did not enter into the legislation, although everyone was predicting at that time that it signalled the end of the IVA, particularly the consumer IVA. How wrong we all were!
The fact is that none of the solutions available (Bankruptcy, IVA, DMP) are perfect. Bankruptcy and IVAs have had to be adapted to fit the insolvent consumer. The current measure will, it is true, remove one advantage of an IVA i.e that of privacy. That may have some impact in the short term. We shall see. There is little that any Insolvency Practitioner will be able to do about it, other than to demonstrate a difference in service levels to all parties between the two.
It will be very interesting to see how the banks react if Bankruptcy numbers increase dramatically.
Ian
Ian Millington
Insolvency Director
PDHL Ltd (formerly Personal Debt Helpline Ltd)
www.pdhl.co.uk