Yesterday the Insolvency Exchange (TIX) proudly announced and boasted the rollout of a "major package of changes to the acceptance criteria for Individual Voluntary Arrangements." While you have to applaud the TIX group for not being bashful about coming forward, you've got to wonder how they can be so proud about changes that do nothing to fix the real problem of consumers getting screwed in IVA reforms which only benefit creditors.

I don't think it is an unreasonable expectation that as a society we shoot for fairness and balance as the target in resolving problems. But I would be dumbstruck if someone would be able to come forward to say that the recently announced IVA reforms benefit consumers in the least.

The current trouble with the IVA marketplace is that creditors are not properly considering fair, reasonable and sustainable binding repayment proposals from consumers in financial trouble. Many creditors in the UK today would rather inflict pain and agony into the lives of consumers struggling enormous financial pressure, by rejecting their IVA repayment proposals, than extend a helpful hand to resolve the problem.

The situation today is so bad that it is almost as if the creditors are putting a boot to the face of the consumer sinking into debt quicksand while at the same time holding a placard that reads "I'm Here to Help."

The Insolvency Exchange press release goes on to say that "the changes will benefit all parties associated with an IVA", but does it really? While it might give you a warm fuzzy feeling to think that these changes make the world a safer and happier place to live, they don't, at least for consumers.

These recently announced changes are all designed to benefit one party, not all as proclaimed. And in case you haven't received your invitation in the post, the party is at the creditor's house.

Forcing insolvency practitioners (IPs) to adopt new and expensive processes and procedures to provide "operational efficiencies" only serves the creditors in their desire to ram fee reductions down the throat of IPs.

You see what the Insolvency Exchange release fails to mention is that creditors are treating UK consumers with contempt and disgust when it comes to allowing people to repay their debt is a fair, reasonable and sustainable way. Operational efficiencies are great for reducing processing costs but that's not where the problems in the IVA marketplace today, unless you are a creditor.

The elephant in the room that nobody can see is the fact that creditors are arbitrarily rejecting fair repayment proposals from consumers, even though the person is making their best effort to repay, simply because the creditor created a line in the sand of requiring at least a certain rate of return that make the creditor gleeful. And if that can't be done, the repayment proposal is rejected and the consumer is told to tuck their tail between their legs and go away.

Creditors are boasting that these ridiculous and grossly unfair policies are working because they can't see a large increase in people going bankrupt after their IVA repayment proposal is rejected. I can only assume that creditors feel that they've batted away the consumer from entering a fair and binding repayment arrangement, only to toss them back into the mass of consumers financially limping along towards the quagmire of debt.

In an ongoing survey about IVAs that is being conducted at http://iva.questionpro.com , people are responding that they would seek other options if their IVA proposal was rejected. When asked "If you propose an IVA to repay your debt and your creditors do not accept your proposal, which of the following options would you consider to resolve your financial problems?" Respondents gave the following responses: Borrow money from a friend or family member - 0%, Enter an informal debt management plan. - 35.71%, Bankruptcy - 42.86%, or Do nothing for now and evaluate my options latter. - 21.43%.

The current crisis in IVAs is not if processors or IPs have "operational efficiencies" but that consumers are not being treated fairly according to codes established by the Financial Services Authority, or the Banking Code proudly promoted by the British Bankers Association.


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