IVA Help

Who can enter into an IVA?

Insolvent individuals with debt over £12,000 can enter into an IVA provided they have monthly disposable income of over £200. However, if you include benefits as your income, it is unlikely you will be accepted for an IVA.

What if my creditors don't agree?

For an IVA to be approved, creditors representing 75% of the total value of debt have to be in favour of your proposal. If it is approved, the other 25% of your creditors will also be legally bound to accept the arrangement. During the negotiation process, your creditors can suggest modifications to the proposal and it is your discretion to accept or reject them.

What if my creditors aren’t in favour?

If you don’t get the required vote from your creditors, you still have the option of bankruptcy or coming to an informal agreement with your creditors.

Will my credit rating be affected?

If you are in debt your credit ratings would be affected anyway. Once an IVA becomes applicable, you will have to give up all your current credit such as credit cards and store cards. You will not be allowed to take additional unsecured borrowings until your IVA is completed.

However, an IVA does not mean that you are blacklisted forever. Once the process is complete your credit ratings should improve over a period of time.

How will an IVA affect my current credit?

During the period of an IVA, your current credit (e.g. credit cards and store cards) will be inactive and you will not be allowed to take additional unsecured borrowings. However, you may be able to take or change a mortgage even while you are still within an IVA but for this you would need to talk to your Insolvency Practitioner.

Will my home be safe?

As a rule, you won’t have to sell your property but you may be required to release your equity by taking out a remortgage in the last year of the IVA.

Should I pay no-win, no-fee upfront fees?

It is important that your proposal is as accurate as possible so as to convince your creditors to vote in its favour and that you are able to meet your monthly commitments.

A poorly constructed proposal can result in rejection, which means the only option you would be left with is bankruptcy. Therefore no-win, no-fee upfront fees can help ensure that you get the best possible expertise and customer service.

How much would I have to pay towards my instalments?

This would depend on your financial circumstances and the amount that is agreed upon between you and your creditors.