A protocol for Debt Management Plans (DMPs) could be introduced in 2012 after the Insolvency Service confirmed that consumer minister Ed Davey would chair a working group assessing the issue.
A protocol was mooted for the debt management solution earlier this year with Davey suggesting at a conference hosted by Credit Today’s sister title, Insolvency Today, that he would chair a group of stakeholders to assess whether such a move was needed.
The Insolvency Service has now confirmed to Credit Today that the first working group meeting will go ahead in the New Year.
An Insolvency Service spokesperson said: “The Insolvency Service is still in discussion with a number of stakeholders from the industry about common standards and practices in debt management.
“In the New Year, the minister will chair the first working group meeting with the industry to develop a protocol for debt management plans, that captures best practice and strives to improve consistency and acceptance rates.”
Industry figures have responded positively to the idea, with representatives from both debt advice providers and the Insolvency Practitioners Association (IPA) suggesting that it would take away from some of the stigma associated with the solution.
However, some providers have urged that the protocol not be so prescriptive that it drives down the ability of commercial providers to offer the solution.
DMPs are in many cases an informal arrangement between creditors, debtors, and debt management providers.
However, the lack of stringent regulation around the solution has led to suspicion that providers are taking too much money out of the process as fees.
To read more, see Credit Today’s special report on insolvency in the January issue, which will hit desks the first week of January 2012.
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