IVA Acceptance Criteria

Do I Qualify For an IVA?
While there are minimum threshold values for an IVA, creditors are looking for people who apply for an IVA to demonstrate their best attempt to repay as much of their debt as is reasonably possible. Here we outline the elements that contribute to a successful IVA proposal.

Applicant must be insolvent

This means the inability to repay debts as they fall due, and these debts total more than the applicant's available assets. An IVA is not possible should personal wealth such as property or other assets be worth significantly more than the debts.

Residency of Applicant

Applicants must be resident in England, Wales or Northern Ireland. IVAs are not available for Scottish residents but there is a similar process, see Trust Deeds.

Debt levels and Number Of Creditors

Applicants need to owe more than £10,000 to creditors (minimum three lines of credit from two or more creditors) and be able to afford at least £150 per month towards their debts in order to potentially qualify for an IVA. Fulfilling these criteria does not necessarily guarantee acceptance.

No worse than Bankruptcy for creditors

The IVA must offer a higher return to creditors than could otherwise be expected were the applicant to be made bankrupt.

IVA payments must be affordable

Creditors need to be confident that the applicant can keep up the IVA payments for the duration of the agreement. While future events can't be known, it is essential that from the offset that the applicant can demonstrate:-

• A reasonably stable ongoing income.
• Affordability of domestic needs without living in poverty.
• They are not spending excessively and living within reasonable means.

Recent periods of unemployment, working through a probationary period in a new job or self-employment without proper accounts are factors which can prejudice an IVA application.

Demonstrable Proof Of Circumstances

An honest declaration of assets and anticipated future earnings should be made. Material or false declarations are likely to result in the subsequent failure of the IVA. An IVA proposal is a legal document so the applicant must provide suitable evidence to support the proposal such as:-

• Recent bank statement to confirm current payments - last 3 months
• Latest statements for all unsecured credit such as credit cards, store cards, catalogues etc.
• Mortgage statement or tenancy agreement.
• Recent wage slips - last 3 months.
• Current council tax bill, including details of arrears if applicable.
• Proof of identification.
• Award letters for State Benefits currently being received.
• Hire purchase and secured loan documentation.

The only way to truly know if you qualify for an IVA is to get professional advice, so please contact us for full information as to your suitability.