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Correspondence between IPs/RPBs and debtors/creditors
That JIC should set a formal standard of best practice for responding promptly to correspondence and keeping both debtors and creditors informed of what is happening.
Some reluctance to implement this recommendation was received and so it is to be repeated.
Statistical information about IVAs
That the profession and the Insolvency service should obtain regular statistics about the effectiveness of Voluntary Arrangements as a basis for their policy and monitoring decisions.
The IS has made progress on this issue but the IPC recommends that more and better statistics available to the regulators will be valuable and so the recommendation is to be repeated.
The giving of best advice to the debtor when an IVA is being considered
That an IP or an authorised member of his/her staff should make a fully detailed assessment of an insolvent debtor’s circumstances, provide a copy to the debtor with the options open and give a reasoned recommendation as to the most appropriate action.
This recommendation is to be repeated now that the proposals for a simplified IVA are nearing fruition as the IPC believes it will be particularly necessary in these circumstances.
2005 Recommendations
Best Advice to the debtor when an IVA is being considered
That Insolvency Practitioners (IPs) should give personal debtors written “best advice” on all the options available to them whenever Individual Voluntary Agreements (IVAs) are being considered. This is increasingly important following the entry into force of the Enterprise Act 2002, which will make bankruptcy a better option for some debtors. We have come across evidence that IVAs are being inappropriately recommended, albeit in a small number of cases, to debtors whose only financial resources come from social security benefits;
Statistical Information about IVAs
That the Insolvency Service (IS) should take steps to improve the statistical information available on the success or failure and the financial outcomes of IVAs to enable the regulators better to monitor the performance of the IPs they license in setting up and supervising IVAs;
Correspondence Between the IPs/RPBs and Debtors/Creditors
That the Recognised Professional Bodies (RPBs) should set a standard of best practice requiring IPs to send timely replies to all correspondence they receive from creditors, debtors and other members of the public. The RPBs should themselves meet the same standard; and
Fees
We support proposals to set up Simplified Individual Voluntary Agreements (SIVAs). We further recommend that there should be a simplified fee structure for SIVAs. As regards fees for corporate insolvency work, we recommend that the regulators should monitor IPs’ compliance with their new obligations to provide sufficient information about the work they have done to enable their creditors and the courts to assess their value for money and effectiveness.