While the Scottish executive mulls over responses to its consultation
document on restructuring insolvency procedures, England’s government agency,
the Insolvency Service, has finally published all the responses to its working
party consultation looking into introducing quicker processes to handle
individuals struggling with debt.
The ‘simple’ IVA (SIVA), which could become law in Autumn 2007, is designed
to make handling indebted individuals and getting a return for creditors a more
IVAs have been popular as an alternative to bankruptcy as part of the
Enterprise Act 2002, and create a legally-binding agreement between debtor and
creditor, handled by a nominee or supervisor, without a creditors’ meeting and
dealt with speedily.
The Insolvency Service has abandoned a plan to cut the creditor out of the
process, which would have prevented the creditor having a say on restructuring
The agency also proposes that a simplified process has no minimum debt level,
and there is no lower limit for unsecured liabilities.
Yet while the profession has lauded the use of individual voluntary
arrangements and plans to simplify and speed up the process further, an
unforeseen problem has arisen.
IVA’s popularity, tied in with ever-growing levels of unmanageable debt among
consumers, has led to pressure on both the insolvency profession and the courts,
in terms of dealing with the sheer numbers of individuals entering into formal
DTI insolvency figures for Q4 2005 revealed a 57% increase in the number of
individual insolvencies in England and Wales to 20,461, compared to the previous
year. The figure was also a 15% increase on the previous quarter.
IVAs formed a huge part of the increase, leaping to 6,960.
R3, the Association of Business Recovery Professionals, warned that the
country’s court system was ‘creaking’ as insolvencies rose.
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children