The government has outlined plans to overhaul individual voluntary
arrangements, requiring fewer court papers to be filed, as such arrangements
surge in popularity.
The Insolvency Service has come
up with plans to streamline the process. The agency originally released two
different proposals for a ‘simple’ IVA, now whittled down to one and in its
final period of consultation.
The simple IVA, or SIVA, is the central part of the agency’s plan to speed up
processes, saving costs for insolvency practitioners and giving better returns
The agency proposes that the SIVA will be for liabilities of less than
£75,000. Creditors will have to attend fewer face-to-face meetings and will not
be able to suggest modifications to the debtor’s proposal. A majority of
creditors, rather than 75%, will make decisions.
A SIVA will, crucially for practitioners, have simpler reporting requirements
and no filing of routine papers to court. Creditors will have to make claims
within 90 days.
The Insolvency Service estimates that as many as 80% of IVAs in 2005 would
have fallen into the SIVA regime.
The Insolvency Practitioners Association welcomes the gist of the proposals,
but warns that there is still much work to do to make sure the banks are kept
IPA policy chief Peter Joyce says two issues must be ‘squared off’:
simplifying the insolvency processes in tandem with reducing barriers for
individuals to administer insolvencies through ‘insolvency-lite’.
Joyce warns that making it easier for debtors to enter insolvency will not be
looked upon kindly by banks if they are concerned about the level of
qualifications required for individuals to manage insolvencies.
‘We think IVAs are good, and SIVAs potentially good, but we don’t want to run
into opposition. Whether creditors in the present climate turn their face
against these proposals, there’s the risk debtors will have to use the more
complicated [IVA] procedures or face bankruptcy,’ said Joyce.
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