Hi
I have looked at the proposed SIVA and have put it in simle terms
The proposed SIVA [Simple IVA]
The insolvency service are proposing to launch a simpler version of the IVA and after consultation with IPs,creditors and debt counselling services it has come up with several proposals.
1] A MAXIMUM UNDISPUTED DEBT LEVEL OF 75K WITH NO MINIMUM REQUIREMENT.
This is fine and should open the SIVA up to the majority of people with personal debts.The undisputed clause will probably mean that crown debts[Inland revenue etc] are excluded in most instances unless the figure can be verified within the time scale.
2] NO RE-ENTRY INTO A SIVA FOR SIX YEARS IF IT FAILS.
This will stop people from using the SIVA as an easy option to clear debts when they have no desire to contribute for the full term.For genuine people who fail during the SIVA the option for the full IVA still exists as a safeguard.
3]NO MINIMUM DIVIDEND
However I am sure that creditors will still have their set minimums[hurdle rates].However it allows people to propose a SIVA without offering an unrealistic dividend.
4]A DEBTORS PROPERTY TO BE DEALT WITH AT THE PROPOSAL STAGE.
This is an excellent condition and will take away the uncertainty that currently exists where debtors are required to remortgage in the fourth year of an IVA for an unknown amount of equity.
Under the SIVA the amount of equity release will be agreed at the proposal stage.
5]NO MODIFICATIONS BY CREDITORS
This may cause problems as creditors will only be able to vote yes or no on the proposal.They may like the proposal except for one detail and would be unable to change this.
In reality a draft proposal may have to go out to creditors to gauge their reaction and feedback,but this will mean more workload for the IP and goes against the whole premise for the SIVA.
6]A 50.1% MAJORITY VOTE
This is welcome and will stop creditors with more than 25% but less than 50% from having the determining vote.It is a fair change both for the creditor and debtor.
7]90 DAY CLAIM LIMIT FOR CREDITORS.
At present the creditor has upto the full term of a five year IVA to lodge a claim.This is a welcome change as the debtor will know his liability after 90 days,however the supervisor will have discretion to add a debt after this date.It will mean that the IP is reliant on the debtor disclosing their full debts and may mean more work for the IP in the proposal stage as they verify claims.
8]NO SET IP FEES
There are no set fees with the current IVA and is the area that is under discussion at the moment.It,s interesting to note that the IPs wanted set monthly charges and nominee fees depending on the size of the debt but the creditors want a percentage paid of money recovered[15%]to be paid to IPs.This area will continue to be debated until the insolvency service legislate the fees paid.
9]THERE WILL BE NO COURT INVOLVEMENT
This is fine and will have no impact on the debtor.
10]THERE WILL BE NO ANNUAL REPORT.
Again there will be very little impact on the debtor.
I welcome the SIVA as it will open up a fixed term solution to people with moderate debt,allow people on neverending debt management plans a chance to addresss their debts with certainty and take away the impact of negative voting from certain creditors.The proposal to deal with any property issues at the start of the SIVA is most welcome as this is an area that causes most uncertainty amongst forum members who are already in an IVA.
However I think that the no modification issue needs addressing as does the issue surrounding fees
Regards
Andy Davie
IVA.co.uk Spokesperson
About me:
http://www.iva.co.uk/andy_davie_profile.asp
IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp
