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IVA-criteria

IVA criteria

The IVA criteria used by Insolvency Practitioners and your creditors are not fixed in stone and can alter by individual case. However we can say what the main IVA criteria are and whether an IVA is going to be a debt solution you can consider.

The main IVA criteria are:

  • You are a resident in England, Wales or Norther Ireland (not Scotland)
  • You are a resident in England, Wales or Norther Ireland (not Scotland)
  • You should owe more than £6,000 to 3 or more companies
  • You should be able to repay 25% or more of your debt
  • You are in stable employment / self employment
  • You can afford to live and have budgeted in a reasonable and fair way with modest living expenses (no big luxuries can be expected e.g. you are not likely to get away with Satellite TV or an expensive flat)
  • Declare and contribute towards your debts from big assets like equity in your home, savings accounts, shares, endowment policies, expensive car etc.
  • Proof of income, expenditure and asset value

You can’t however decide that you want an IVA. It has to be chosen with you and for you by an Insolvency Practitioner that are part of IVA companies.

Applying for an IVA

To get immediate help now, use our IVA advice service which is accessed via charity advisors. They are experts in assessing whether an IVA is the best solution for you and helping you organise one if that’s what you want.

Summary

What is an IVA

  • Introduced by the Government in 1986 as an alternative to bankruptcy
  • Typically, you need to owe more than £6,000 and have something to offer to your creditors each month
  • Typically you can write-off 50% – 60% of your debt and pay the balance over 5 years (60 months)
  • Interest and charges stop and creditors can’t change their mind
  • Your home is protected but you may be required to release any equity you have
  • Someone enters an IVA in England and Wales every 13 minutes
  • We only recommend organisations that have a track record of getting IVA’s accepted by creditors and don’t charge upfront fees

Comparison Table Of Debt Solutions

Solutions Debts Written Off Legally Binding Interests & Charges Residential Status Fees Notes
IVA Yes – Average 58% Yes Stopped Tenant or Homeowner (Eng/Wales) Yes on average around 20% of the payments you make to creditors Typically you must have debts over £15,000 and be able to offer yourcreditors about 20% of the value of the debt back over 5 years.
Debt Management No No Many Freeze Tenant or Homeowner Yes In a Debt Management Plan, you will be required to repay all of your debt in full.
Consolidation No yes New Rates & Charges Tenant or Homeowner Yes Consolidating your debts generally means you’ll pay more back over a longer period of time.
Bankruptcy yes yes Stopped Tenant or Homeowner (Eng/Wales) Yes – up to £700 depending on your circumstances. You may also be subject to a 3 year Income Payments You need to think carefully about all the affect bankruptcy will have on your home and your employment.
Debt Relief Order yes yes Stopped Tenant Yes – £90 You must have debts under £15,000 and have little in the way of assets

 

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