myi: What makes your company different the others?
Our primary focus is on customer care and ensuring that clients have the full range of debt solutions available. Even if we can't help them directly we will know someone who can and will happily point them in the right direction.
As a matter of policy we never turn anybody away.
Since 1992, I have been a Licensed Insolvency Practitioner. This means we can do all our IVA’s in -house.
In itself that's not much of a difference, lots of firms can say that. However, because of the number of new IVA proposals we prepare each month we can operate our IVA Team more like a small firm, meaning that the client does not get the feeling of being passed from person to person.
I feel that as a result, our staff really get to know and understand the clients and this is reflected in the feedback we get.
myi: Have creditors attitudes towards IVAs changed?
Yes they have, and I think the IVA protocol has played a big part in that.
The creditors in general are becoming more and more supportive of IVA’s and somebody who may not have met their acceptance criteria a couple of years back may now find that this is no longer the case.
As a general rule the days of a minimum contribution level or a minimum dividend are long gone. Whilst there will always be exceptions to prove that rule, so long as the proposal makes sense and it gives the creditors a better deal than they would otherwise get, then there is a great chance they will accept it.
For this reason our Debt Management Team is constantly reviewing their client portfolio to look for those cases where an IVA has now become the appropriate solution.
They do find cases where people originally entered into a Debt Management Plan because that was the right thing to do at the time, whereas an IVA is now worth considering again. I believe that we have a professional and moral responsibility to do this.
We have also found that when the creditors have voted to accept an IVA they are as keen as we are to see it work.
In my experience, if a debtor's circumstances change for the worse, and they can no longer afford to pay the contracted payments, the creditors would generally prefer to take a reduction in contributions than see the IVA fail.
myi: What opportunities do you have for your Partners?
We have a dedicated website for our partners which is constantly being developed. We keep in regular contract with them providing them with regular technical updates.
Where cases have been referred to us, we provide regular progress reports at previously agreed intervals. Also we will very shortly hold a breakfast seminar which will give our partners an opportunity to meet and get to know us.
This will include an introduction to the range of solutions that our partners can market, and details of the rewards we can offer.
These are:
1. IVAs – typically based on 5 year contributions but these can also be based on a lump-sum Full and Final Settlement.
2. Debt Management Plans, under certain circumstances we may be able to negotiate full and final settlements on an informal basis.
3. Corporate Insolvency Services, including CVAs and Liquidations.
myi: A recent report from the Insolvency Service suggests that IVA’s are down by 8% in comparison to the corresponding quarter of the previous year. What do you make of this?
I think you need to look at the statistics in some detail. The figures for the 1st quarter of 2011 do indeed show a reduction of 8% (947) when compared with the same period last year.
However, a key statistic to point out is that there has been a 31% drop in the number of bankruptcy orders (5717) in the same period. This can only in part be accounted for by an increase of 20.3% (1144) in the number of Debt Relief Orders, taking out the very bottom end of the bankruptcy market.
Against a background of a 15.5% drop (5520) in personal insolvencies overall, in numbers terms I think the IVA market held up pretty well. That having been said, as I have pointed out earlier, the entry point appears to be moving downwards so it's possible that the impact has been mitigated by IVA stakeholders reacting to the market conditions.
Another factor, and one possible explanation for the drop in the bankruptcy numbers is the cost of bankruptcy proceedings.
For example, a couple with a disposable income of say £200 will now have to save up for 7 months before they can present a petition and, in many cases, the creditors might not want to just sit back and wait.
As a result, I personally know that some of these people are entering into IVAs instead and many, I suspect, are entering into informal schemes such as DMPs.
I don't think the figures suggest there will be a substantial downturn in the IVA/DMP numbers at least in the very near future.
However, one thing that is clear is that consumers are spending less, either by being more frugal or by being unable to get credit. This is now being felt by the retail sector as evidenced by the recent increase of High-Street names going into Administration.
This will need to be watched as the effect of this on people’s employment, and as a result their ability to service their obligations, must be a concern.
