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Debtors 'in dark' about repayment fees

Published on 14 Jan 2010 under category: legal

Debtors remain confused about how to pay insolvency practitioners, according to a new review.

The Insolvency Service has found that more than a fifth of debtors are unsure whether they had paid the nominal fee to the supervisor of their debt repayment plan.

Despite the introduction of the IVA protocol - a set of ethical guidelines for insolvency practitioners - two years ago, insolvency practitioners (IPs) are still failing to explain to debtors how much of their money is actually going towards paying off their debts.

Guidelines set out in February 2008 also stated that IPs should provide individual counselling for debtors and take into account non-financial factors in their repayments.

The report concluded that the IP fees should increase even though it could mean less access to IVAs for some debtors. Also, the fee was currently too low to reflect the work required to supervise an IVA over the course of its existence.

If you require advice on Insolvency and Bankruptcy please call us on +44 (0)20 7831 0101 and ask for Katherine Sillett.