HSBC's IVA policy explained
After years of struggling to get HSBC to change their attitude towards IVAs it would appear that the introduction of the IVA protocol has worked wonders.
As with all creditors, HSBC's influence on any given IVAs chance of success is based around their percentage of the applicant's total debt.
Controlling The Vote
In IVA proposals where HSBC own more than 25% of the total debt they have what's referred to as a controlling vote.
This means that whenever HSBC, or any other creditor for that matter, own more than 25% of the over all debt in the IVA the success of the IVA will be determined by whether HSBC vote to accept the proposal in front of them.
Pre IVA Protocol
Historically, we would have seen HSBC reject IVA proposals that offered IVA dividends below 40 pence in the pound, after the deduction of costs.
By implementing this artificial 'hurdle rate', HSBC were effectively controlling the numbers of their clients suffering with serious debt problems being accepted for an IVA.
Post IVA Protocol
But it seems that HSBC have now reconsidered their stance, with more Insolvency Practitioners reporting HSBC's position has fallen into line with other 'high street' creditors in settling for the more achievable 25 pence return.
It used to be the case that each creditor had a different policy when it came to IVA's, with each having their own specific criteria needing to be met before they'd consider an IVA as an option.
But, thankfully, since the introduction of the IVA protocol this is no longer the case.
Now very few creditors stand against the principle of IVA's and those that do tend to be the newer, less established creditors from the pay-day loan sector.
But, most creditors recognise the fairness of the IVA protocol as well as appreciated the changes to the IP's fees it introduced and are happy to work with it rather than push against.
Professional IVA Advice
If you want to have a chat with one of our IVA advisers to establish whether you meet the necessary criteria for an IVA then call 0800 088 7503
There's no charge for a consultation, there's no obligation to act on our advice and your enquiry will be held in the strictest confidence.
Alternatively, complete this form and one of our advisers will contact you at your preferred time.