Sep 7 2007
The impact of creditors who routinely ‘blanket reject’ IVAs.

Andy Davie, site manager for IVA.co.uk, the UK’s biggest online IVA community for information and advice about Individual Voluntary Arrangements (IVAs) commented,

“Yesterday I visited Alistair Burt, MP for North East Bedfordshire, to draw his attention to the worrying problem of creditors that seemingly blanket reject proposals on principle rather than on the merit of the IVA. The rate for rejection of IVAs varies between creditors and the problem arises when creditors such as Northern Rock do not appear to consider the individual merits of each IVA - this is clearly unacceptable.

Mr Burt appreciates the merits of the IVA in giving those in financial straits a second chance. He has pledged to write to both the government’s Insolvency Service and Northern Rock themselves, stating the case for the consumer and asking them to consider how creditors with such high rejection rates are interpreting the Banking Code to treat their customers “fairly and positively”.

Northern Rock’s rejection rate of IVAs is much higher than the industry standard. Those who owe money to Northern Rock therefore have a much lower chance of entering into an IVA, and are often forced into bankruptcy, losing their homes in the process. In some cases Insolvency Practitioners are not even proposing perfectly viable IVAs where Northern Rock are one of the main creditors. This issue does not only affect those who are applying for IVAs but also other creditors who will also suffer as IVAs that they have approved are rejected. ”