Ministers reject simpler debt plans
Ministers have axed plans to make it easier for struggling families to avoid bankruptcy.
Debt experts, banks and the Government’s Insolvency Service had been in negotiations for a new type of individual voluntary arrangement (IVA) but, yesterday, the Insolvency Service said the plans were shelved.
IVAs are an agreement between debtors and their creditors, which involve a certain proportion of the debt being repaid within five years.
If the main creditors do not agree to an IVA, borrowers can be forced into bankruptcy.
The new IVA would have made it harder for creditors to do that, the Insolvency Practitioners Association said.