In many cases this bank holds more than 25% of the casting vote and as an Individual Voluntary Agreement needs 75% of the vote to be for the agreement this bank is able to veto the Individual Voluntary Agreement. Due to their stubborness to agree to the proposed dividend many people who have debts with them are being advised to declare themselves insolvent via a bankruptcy petition.

Why has one lender taken this stance? Surely it would be better to accept a 25 pence per pound dividend than nothing at all?

With the approaching launch of TIX fee structure Insolvency Practitioners are being forced to charge fixed rates of 15% of the monthly payments. Such restrictions will likely see more people being advised against Individual Voluntary Agreements. An Individual Voluntary Agreement paying £200 per month would net the Insolvency Practitioner £30 per month (total of £1800 over the 5 years). Imagine trying to get a Solicitor to agree to five years work for £1800!

It is sad to see the numbers entering in to an Individual Voluntary Agreement dropping as they generally have above 70% success rate and some Insolvency Practitioners are able to complete 95% on the Individual Voluntary Agreements they have acted on.

For an Individual Voluntary Agreement to work the individuals and the Insolvency Practitioner need to fully understand their circumstances. Many of the Individual Voluntary Agreements that fail are due to the payments being set unrealistically high, making it impossible for the debtor to continue with the Individual Voluntary Agreement.

Obviously there are other options like Debt Management, but they are not legally binding and your creditor can still pursue you through a County Court Judgement or by petitioning for your Bankruptcy.