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IVA protocol

The IVA protocol is a voluntary framework for dealing with straightforward consumer-based IVAs, aimed at increasing trust and confidence between the participants in an IVA and also improving the efficiency of the IVA process.

It was developed after extensive work and cooperation by those representing debtors, lenders, insolvency practitioners and regulatory and representative bodies.

The ongoing effectiveness of the protocol will be overseen by a standing committee, on which the ICAEW is represented. The IVA protocol and related documents are available on the Insolvency Service's website.

The British Banking Association (BBA) has confirmed that its members will support the protocol but it cannot commit non-BBA creditors. You can view a list of BBA members on the British Banking Association (BBA) website.

The standing committee has a remit to keep the protocol under review. You can let us know how you think the protocol is working by emailing ivaprotocol@icaew.com.

IVA protocol frequently asked questions

Do I have to use the protocol?

No. The protocol only applies to 'straightforward consumer-based' IVAs (as defined in the protocol). So if you are not dealing with such an IVA then the protocol does not apply.

Also, in the circumstances of a particular case you may decide not to use the protocol or only use it in part.

In the latter case you should clearly indicate the changes you have made to the protocol standards. However, the more changes you make, the slower it will be for the creditors to process and the more questions they may raise.

Are the self employed excluded from the protocol?

No. The key point is that the debtor's income is verifiable and predictable. Again, you should make absolutely clear in the proposal what the source of the income is.

Is the protocol designed to be used by IPs who do large volumes of IVAs?

Yes and no. The protocol is designed for use by any IP who deals with IVAs, regardless of volume. The protocol uses standard wordings etc. and should save 're-inventing the wheel' for all practitioners, including those who deal with low volumes of IVAs.

Will creditors always accept protocol compliant IVAs?

In theory yes, in practice this may be a case of wait and see. The BBA letter of support notes that BBA members 'are expected to abide by the terms of the protocol'.

However, it may be the case that creditors have other information about the debtor that suggests 'errors' in the proposal and so reject the proposal or seek modifications on the proposed fees.

Will creditor agents abide by the protocol?

Yes. Creditors' agents have said that they will act in accordance with the instructions of their principals, who, if BBA members, have also stated that they will act in accordance with the protocol.

I'm not happy with the content of the protocol - can it be changed?

Possibly. There is a standing committee on which ICAEW is represented. One of its functions is to keep the protocol under review and make changes. So if you have any comments please let us know via ivaprotocol@icaew.com.

Will the QAD reviewers be checking whether I've used the protocol?

Possibly. The reviewers will select a representative sample of your cases. This may include some 'protocol' cases and the reviewer will undertake their usual work. The key point is that if the IVA documentation indicates that the protocol has been used the reviewer will check that the terms of the protocol have been followed.

What about non-BBA members, will they follow the protocol?

Possibly. The protocol is effectively between IPs and BBA members. We understand that the BBA represents the majority of creditors but there will be cases when you are dealing with a proposal when a creditor is not a BBA member. The standing committee will be considering how non-BBA members can be included.

Were IPs involved in the development of the protocol?

Yes. There were two 'open' meetings of approximately 150 people, organised by the Insolvency Service. They invited representatives from creditor organisations and IPs. ICAEW staff also attended.

In turn, four working parties were set up to deal with aspects of the protocol and IPs were represented on all the groups. We wrote to all our licensed IPs (via Insolvency News) in July and November 2007 to inform IPs of the developing protocol and to invite comments.

Will the standing committee continue to be involved going forward?

Yes. As mentioned above, one of the functions of the standing committee is to keep the wording of the protocol under review. In addition it will develop ways of providing better market information about IVAs. More importantly, it will assess how the protocol is used in practice and receive reports of 'non-compliance'.