Individual Voluntary Arrangements (IVAs) offer a way for thousands of people each year to solve their debt problems. With an IVA you can reduce your repayments and have some of your debts written off.
Whether you qualify for an Individual Voluntary Arrangement depends on a number of criteria. There is however a reasonable level of flexibility in this and each IVA proposal will be judged on its own merits.
To discover whether an IVA will be the right solution for you use our Quick Debt Solution Finder on the right hand side of this page. Alternatively for immediate assistance call our free phone number 0800 028 4422.
Typically your eligibility for an IVA will be assessed according to the following qualifying criteria -
Amount of Debt
To qualify for an IVA you are usually expected to have combined debts of at least £10000 (in some cases lower amounts considered). If you owe less than this amount your creditors may believe that the proposal isn't in their best interests. For low amounts of debt the costs of the IVA can make it difficult for creditors to recover enough money to make it worthwhile.
Number of Creditors
Although there is no legal minimum requirement, generally for an IVA to be an option you will need to owe money to at least two separate creditors. This is because it is considered that having more creditors increases the chances of the IVA proposal being accepted.
Employment Status and Income
An important IVA qualifying criteria is your employment status and income. When making an application you need to be able to demonstrate to your creditors that you will be able to keep up with the monthly repayments. This is usually done by showing that you work either full time or part time and so have a regular income. If you are self employed you are still eligible to apply for an IVA.
Type of Debt
IVAs are designed to help people with unsecured debt problems and so not every type of debt can be included. Qualifying debts include credit cards, store cards, bank overdrafts and tax arrears. Types of debt that can't be cleared in an IVA include mortgage payments, secured loans, child support payments and court fines.
When applying for an IVA you will usually have to include information about any assets you have. To qualify for an IVA it is expected that you don't have any realisable assets that could be used to pay off what you owe. For example if you own an expensive car that could be sold to repay your debts then doing this would be seen by your creditors as the better option. Savings, investments and equity in your home are other examples of realisable assets.
Where you live
Individual Voluntary Arrangements are only available to residents of England, Wales and Northern Ireland. For people who live in Scotland the Scottish equivalent of an IVA is known as a Protected Trust Deed.
Although technically not one of the qualifying criteria another factor that shouldn't be ignored is your creditors since it is them that approve or reject the IVA proposal. To begin an IVA you need the agreement of 75% of your creditors. Therefore you need creditors that will look on your proposal favourably and recognise it as the best option for both parties.
At Royal Exchange we can assist you on all aspects of applying for an IVA. As licensed insolvency practitioners we are authorised to manage your Individual Voluntary Arrangement from start to finish.
For more advice on qualifying for an IVA and whether it is the best solution to your debt problems call our helpline on 0800 028 4422. Alternatively complete the enquiry form and one of our advisors will call you back.