Do you qualify for an IVA?

As most people’s individual finances vary, there is no one debt solution that is suitable for everyone’s situation. IVAs were brought in by the Government in 1986 as an effective and fair method of dealing with unmanageable levels of debt.

As an IVA involves a legally binding process, there are some set criteria which are used to determine whether or not this particular way of dealing with debt is the best approach for you to take.

Here are just five of the main areas that are looked at when considering IVA applications;

• Your level of debt – For an IVA you should owe at least a total of £15,000 to three or more creditors and there is no upper ceiling for the amount of debt. This £15,000 figure is due to the amount of work and preparation that’s involved in putting an IVA proposal together initially. The cost implications don’t make it viable for smaller levels of debt.
• You must be insolvent – IVAs shouldn’t be viewed as an easy way to get rid of some debts that you don’t want to pay back. You have to be able to demonstrate that your monthly repayments to your unsecured creditors are beyond your means before you can be considered for an IVA.
• Your IVA repayments – Generally speaking you should have at least £200 a month disposable income for your IVA to work. Many creditors however will be looking to receive at least 30% of the total amount they’re owed or they won’t consider your IVA application. When you apply for an IVA, an Insolvency Practitioner will advise on a realistic amount that your creditors are likely to agree to and then look at how affordable that is for you on a monthly basis.
• Where you live – You need to be resident in England, Wales or Northern Ireland to be eligible for an IVA. If you live in Scotland there is an equivalent to IVAs known as a Protected Trust Deed that works in a similar way.
• Providing proof – Since an IVA is a legally binding process for you and your creditors, your finances will need to be examined closely in order to discover if you’re eligible. This means providing accurate and up-to-date information when requested to do so. If you’re unable to or uncomfortable with doing this, then your IVA will stall before it’s even been put to your creditors to vote on.
  

The criteria listed here give a general insight into some of the key areas that are considered by an Insolvency Practitioner when deciding whether to take your IVA proposal forward and send it to your unsecured creditors for their decision.

Call now on 08000 43 43 47 to discover if an IVA could be the solution to your debt problems or complete our IVA Wizard and see if you qualify for an IVA