Insolvency Practitioners Speak Out In IVA Survey About TIX Demanded
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 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?
Source: myvesta.org
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