An Insolvent Decade: The Changing Nature of the Iva 1987-1997

Abstract

This paper summarizes research findings from a survey of a representative sample of Individual Voluntary Arrangements (IVAs) commenced in 1994-5. Progress of cases is tracked and key design points and features compared with a similar survey of IVAs from 1987-8.

A particular focus is placed on the role and activities of creditors in IVAs and it is shown that debtor non-co-operation remains the key failure reason for IVAs. In addition the survey sheds light on creditor influence and pressure and suggests that creditor interest in IVAs does not always have a positive effect.

The concept of debtor non-co-operation is explored and the generation of unrealistic and optimistic proposals reviewed.

Finally, the paper compares key IVA features associated with successfully concluded cases across the ten years that this personal insolvency vehicle has been available.

JEL Classification: K20, G33, G38