I found this article on the internet and thought it may be of some interests to those of us seeking IVAs. Google: The Insolvency Exchange to read the full article.
It also explains why certain creditors demand 40p/£ just to be considered for an IVA. One of my creditors is HSBC and did just that.
Banks to seal debt escape route
Dan Atkinson, Mail on Sunday
12 November 2006
Reader comments (5)
Thousands of people trying to escape some or most of their debts could be stopped in their tracks by a new centralised service offered to banks and other lenders.
Rather than enter into an Individual Voluntary Arrangement, in which borrowers propose to pay back a slice of their debts and have the rest written off, many would have arrangements rejected and be told to pay back everything they owe.
IVAs were introduced in 1986 as an alternative to bankruptcy. Their use has grown rapidly in recent years as household debts have soared and because of a wider awareness that they exist.
HSBC and HBoS have already signed up with the 'insolvency exchange', and other finance groups are in talks with its parent group, debt-management firm TDX.
The banks will outsource decisions over IVA proposals to the exchange, which believes it will spot 'rogue' insolvency practitioners who push people into inappropriate IVAs to pocket fees of £7,000 or more a time. It believes about 10% of IVAs approved by lenders ought to be rejected.
With HSBC and HBoS on board, it could throw out more than 2,400 IVA proposals a year. If all lenders sign up to the service, that would rise to 3,800.
Last week's interest rate rise is likely to add to the huge debt burden being carried by people who have overborrowed.
Lenders have been criticised for providing too much easy credit and for being too willing to approve IVAs. A much more rigorous approach has been promised by TDX.
The banks themselves became alarmed after IVAs soared to 12,228 in the third quarter of this year, a 118% increase on the same period last year.
All I have left is my humour.
