The British Insolvency Service has began a 12-week consultation process today looking at proposals to simplify Individual Voluntary Arrangements (IVAs). Borne out no doubt by the huge levels and some may say, out of control levels of personal debt spiraling over £1 trillion pounds.

IVAs were introduced just over 20 years ago under the 1986 Insolvency Act to provide a flexible debt resolution alternative to bankruptcy for professionals and company directors, supervised by Insolvency Practitioners (IP).

Proposals to simplify the current process for those with undisputed debts of less than £75,000 include approval of an IVA by a simple majority vote, creditors not being able to change the debtors proposals and creditors having to file their claims within 90 days.

Since their introduction IPs have continued to supervise IVAs but a growing number of people in full time jobs with debts are taking up them up as a means of managing their debts as an alternative to using a debt management company.

There are also proposals to reduce the administrative burden on Insolvency Practitioners (IPs) who supervise IVAs, ultimately reducing the administrative cost to the debtors. The industry awaits their findings after the consultation ends on the 3 August 2007.

Enable Finance Ltd. feel that simplifying the IVA process, will only result in a greater number of personal insolvency's creating and adding to a growing pool of insolvent home owners. Home owners should be aware that most insolvency arrangements may require them, as part of the IVA terms and conditions, to release equity from their property as part of a full and final settlement.

Whilst IVA's can be a good mechanism to reduce and control your debts, home owners should be mindful of their obligation to remortgage to release equity, resulting in further demand for IVA mortgage products allowing for this level of adverse credit history.

Enable Finance the bad credit remortgage specialist have spent years working with Mortgage Lenders and Insolvency Practitioners developing these types of products ensuring customers have a choice and selection that best suits their circumstances.