New regulatory framework for IVA monitoring

The Insolvency Practitioners Association (IPA) is launching a new regulatory framework for the monitoring of the use of an Individual Voluntary Arrangement (IVA) by the high volume IVA providers.

An IVA is one of the debt management solutions available to members, which allows members to enter into a binding agreement with their creditors to repay part of what they owe over a period of time, typically four to five years. An IVA must be supervised by an Insolvency Practitioner (IP) and the majority of IP’s who work on IVA’s are regulated by the IPA.

The number of consumers seeking debt relief through an IVA has increased significantly over the past decade, with recent numbers exceeding 60,000 per annum and the IPA is keen to ensure that the sector has a robust and meaningful process of regulation that will protect both consumer debtors and creditors.

The IPA is to introduce a new way to regulate the industry using continuous monitoring, with real time access to systems. This will provide IPA inspectors with the information they require to target visits on those areas that require improvement. The IPA is planning to expand its inspector network, and bring in specialists, to enable more frequent inspections for those organisations who operate in this sector, with up to 4 visits per annum.

The IPA hope that the more intensive regime will improve trust and confidence in this sector and enable them to assist IP’s to improve their working practices. The aim is to give the consumer a greater degree of trust in the advice they are being given and provide confidence to creditors that the IVA process is transparent, with a regulatory framework that is meaningful and robust.