What are the criteria required to accept an IVA?

We have explained in some detail about an IVA such as, how an IVA is started, the costs involved with an IVA, the IVA approval process and even how an IVA works. In this section we will go into detail about the criteria that has to be satisfied in order for an IVA to be accepted.

Since the introduction of IVAs the IVA team at The UK Insolvency Helpline has dealt with over hundred thousand IVA cases. In this time we have developed the most up to date and complex systems which can provide us the exact criteria required to accept an IVA.

I the early days, when the law was new an IVA was a very simple document. To get an IVA accepted  a client just showed that he was offering more that would be offered that if he or she was to go bankrupt.

Nowadays the criteria required to accept an IVA couldn’t be more different especially because all the major banks leave the decision to accept an IVA with professional reprehensives of large accountancy firms such as PriceWaterhouseCoopers and KPMG.

The typical IVA criteria required to accept an IVA are now the following:

• Debts greater than £15,000
• 3 or more creditors. This can not be three debts to the same bank such as Barclaycard visa, Barclay Loan and Barclay’s overdraft. The Criteria required to accept an IVA must be separate institutions.
• Disposable income over £200 per month, assets to release or a 3rd party to contribute into the arrangement.
  You must be able to pay creditors at least a 25 pence in the pound dividend. Many IVA cases fail because applicants can not afford to make a decent monthly payment.
• You should have a regular income stream. Those who have some good months and some bad months will have to make sure they can make a regular payment. Some IVA cases fail because applicant’s income is irregular or unreliable.
• Applicants must be able to show they have allowed for reasonable necessary living expenses such food, utilities, travel costs, council tax etc. Creditors are constantly criticising those who state too much or too little for food. Some IVA cases fail because applicants spend too much on car hire purchase payments.
• The insolvency practitioner must make a positive 'Nominees Report' which portrays a professional opinion as to whether the Individual Voluntary Arrangement - IVA is a bonafide offer. He or she will decide whether the applicant is going be reliable and this perform the IVA successfully.

If these criteria are met, the IVA team will explore all available debt solutions and recommend an IVA where appropriate. However, if any of these criteria cannot be met, the Company is unlikely to recommend an IVA. In these circumstances the Company may recommend an alternative solution for the debtor which would typically be debt management or debt counselling via a charitable organisation.

Please note that IVA criteria are negotiable and so please call or email the IVA team for a no-obligation assessment. Alternatively please complete the below form and a member of IVA team will call you to assess you case and see whether you fit the IVA criteria.

If you wish to discuss the Individual Voluntary Arrangement (IVA) procedure and understand how it can help you please complete the following form or telephone freephone 0800 074 6918.

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