SIVAs are no longer happening

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Post by MelanieGiles » Tue Nov 18, 2008 8:29 am
As I predicted some time ago, with the advent of the IVA Protocol, the eagerly awaited SIVA, which provided the debtor with the opportunity from benefitting from a 50% majority rather than 75% voting at creditors meetings has now been shelved.

The following is an extract from an announcement made by the IPA earlier this morning:-

The Government Insolvency Service has announced that it is not now proceeding with proposals which would have introduced:

· a simplified scheme for debtors (mainly consumers in debt) seeking to come to an arrangement with their creditors; and

Commenting on the decision not to proceed, IPA Chief Executive, David Kerr, said “The simplified individual voluntary arrangement (SIVA) scheme would have made it more difficult for creditors to defeat reasonable proposals for repayment by setting arbitrary minimum levels of return which take no account of debtors’ circumstances and what they can afford to pay.”

He said that considerable progress had been made through the Protocol agreed in January 2008 between the Government Insolvency Service, the insolvency profession, the British Bankers Association representing the banks, and other stakeholders to address issues which creditors and practitioners had raised in connection with the process of agreeing proposals. “But certain creditors are still insisting on receiving more than debtors can afford pay in some cases, resulting in proposals being rejected even where the creditor represents only 25% of the debts. That can be in nobody’s interest – it denies the debtor access to a statutory debt relief procedure and it denies other creditors the opportunity of seeing the debtor’s affairs brought within an orderly framework for repayment. We hope that the Government will explore further through the Standing Committee which oversees the Protocol how those interests can be protected going forward, where appropriate by applying pressure on those banks which adopt an unreasonable stance.”
Regards, Melanie Giles, Insolvency Practitioner


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Post by kalla » Tue Nov 18, 2008 2:18 pm
Melanie,I can't say this announcement surprises me....No...especialy with the mammoth Recession beating the hell out of the markets and businesses with profits and defaults hiting the skids........very much a stake into the banks left arm you can say.

The SIVA would have in theory allowed more IVA type successes through(fairer I suppose) than otherwise possible with the standard IVA but potentialy lowering the returns threshold even further? There was aways a question of whether the SIVA consolidation process was ever going to give debtor more of an edge in a rather uneven level IVA playing field.{Understandably as debtors have spent the banks money and would not be expected to be calling the shots of what and when to pay back}Humilty is expected.

Like a game of Cards, I feel the banks still want to have the final 'tipping the balance' vote i the whole IVA process.The BBA cartel clearly VETOED this SIVA motion. They have been vocally against the banning of compulsory PP sales with loans and the OFT's interference on Bank charge levy. The banks are a cartel and unless they feel first and formost the desire to do something no concessions will be passed.

Neither the Insolvency Service or the governemnt can 'outvote' them...its evident by this announcement who the Boss is. Not a step forward but a step back with more bank control of the IVA process.


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Post by janderson » Tue Nov 18, 2008 2:46 pm
Hi All

I am amazed and not surprised that the creditors have shoved this into the long grass. It is another example of the people who need the help the most been thrown to the wolves for the banking and financial sector to be able to pick over the carcass of the customer they say they value.

We were looking forward to the SIVA as a possible solution to our problem. Well the banks will have to wait for 40 or 50 years for our debt to be repayed via our DMP.

Once again thank you caring banking sector




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Post by hopefull1 » Tue Nov 18, 2008 4:08 pm

I think this is going to leave alot of people in a difficult situation. This could lead potentially to a rise in bankrupcies or people on dmps. I hope that this means that creditors are going to be more understanding with people on dmps as at least this way they are going to get some of their money back.



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Post by David Mond » Tue Nov 18, 2008 6:57 pm
Melanie I owe you a meal! However you did in your thread predict September 2009! ... _ID=149405

In my capacity as the Chairman of the Debt Resolution Forum here is the Press Release going out tomorrow:

For Immediate release: Wednesday 19 November 2008


„« New debt rescue tool withdrawn by government at last minute

„« SIVAs could have prevented lenders frustrating fair debt relief for consumers

„« A blow against debt resolution ¡V as the credit crunch bites

The Debt Resolution Forum (DRF), which represents firms handling the majority of IVAs and debt management plans in the UK today, 18 November, condemned the government¡¦s announcement to scrap Simple IVAs (SIVAs).

Commenting, DRF Chairman, David Mond, said:

"It is impossible to understand why, just at the moment when more people need more help with debt than ever before, the government should decide to destroy years of work by the debt resolution sector, money advice charities and lenders by scrapping the introduction of the SIVA".

The Government's Insolvency Service has withdrawn the legislative reform order (LRO) that would have seen SIVAs made available to the public in spring 2009 ¡V saying that this year¡¦s IVA Protocol has achieved many of the objectives of the SIVA. The Debt Resolution Forum disagrees:

"The IVA Protocol is of great benefit to all, but especially the banks" says Mond, "in that it has driven down IVA fees."

"However, it has not yet achieved its other main objective. Banks and credit card companies are still frustrating people¡¦s efforts to use their best efforts to repay as much debt as they can afford. The SIVA, with it¡¦s simple majority voting and no modifications would have meant far fewer creditors would be able to stop IVAs by requiring over-indebted individuals to repay more than they can afford".

"DRF will continue to work within the IVA Standing Committee to gain creditor acceptance of the principles that a debtor should be entitled to an IVA if it is affordable, achievable and represents their best efforts - but a huge opportunity has been missed to offer affordable and well regulated debt relief to the hundreds of thousands who will need it as the credit crunch bites. The banks will benefit from this decision ¡V not the struggling consumer."

This is the start of the war to give proper help to these consumers.

Watch this space.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.

Adam Davies

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Post by Adam Davies » Wed Nov 19, 2008 8:59 am
The Banks etc are just too powerful and have probably put enormous pressure on the Goverment to shelve this.
With the recent bail out of the banks by the Goverment it seems to be
Banks 2 Jo Public 0
Andam Davies
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