If you’re struggling with debt and considering an Individual Voluntary Arrangement (IVA) as a solution, it’s important to understand the eligibility requirements before proceeding. An IVA can be a powerful tool to Resolve Financial Stress and provide a clear path to Maintaining Financial Stability. However, not everyone will qualify for this option. In this blog, we’ll walk you through the key requirements and offer a practical checklist to ensure you meet the criteria.

An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors to pay back a portion of your debt over a set period (typically five or six years). Once the agreement is completed, any remaining eligible debt is written off. It’s a good alternative to bankruptcy for individuals who want to protect their assets and avoid the more severe repercussions of declaring bankruptcy.

What is an IVA?

However, to qualify for an IVA, certain conditions must be met. Let’s take a look at the checklist of requirements for UK Citizens.

1. Unsecured Debt of at Least £6,000

To qualify for an IVA, you must have at least £6,000 of unsecured debt. This includes debts such as:

• Credit cards
• Personal loans
• Payday loans
• Store cards
  Secured debts (like mortgages or car loans) do not qualify for inclusion in an IVA, but unsecured debts can be dealt with through this process.

2. Owing Money to Multiple Creditors

You must owe money to at least two or more creditors. This helps ensure that your creditors have a vested interest in agreeing to an IVA. If you owe money to only one creditor, you may need to explore other options, such as negotiating directly with that creditor or applying for a Debt Relief Order (DRO).

3. Affordability of Regular Payments

One of the most important factors in qualifying for an IVA is ensuring you can afford to make regular monthly payments toward your debt. Typically, these payments are at least £70 per month. If you cannot commit to this, an IVA may not be the right solution for you.

4. Residing in England, Wales, or Northern Ireland

IVAs are available to residents of England, Wales, and Northern Ireland. If you live in Scotland, a similar solution, such as a Trust Deed, may be more appropriate. It’s important to check your location’s specific laws regarding debt management.

5. Willingness to Stick to the Repayment Plan

An IVA is a serious commitment. You’ll be required to make monthly payments for a set period, typically five to six years. If you miss a payment or fail to stick to the terms of the agreement, the IVA may fail, and creditors could take further action. Therefore, you must be willing and able to stick to the repayment plan before applying.

6. No Recent Bankruptcy

If you’ve been declared bankrupt recently (usually within the past 12 months), you may not be eligible for an IVA. However, if your bankruptcy has been discharged or you’ve been out of bankruptcy for more than a year, you could potentially apply for an IVA.

7. Insolvency Practitioner (IP) Assessment

Once you meet the above criteria, an Insolvency Practitioner (IP) will assess your financial situation. The IP will work with you to create a proposal for your IVA, which will outline how much you can afford to repay and how long the arrangement will last. Your creditors will then vote on the proposal, and if at least 75% agree, your IVA will be approved.

8. Your IVA Proposal Must Be Feasible

In addition to assessing your ability to make payments, the Insolvency Practitioner will consider the feasibility of the IVA proposal. This means they’ll ensure that the repayment plan is reasonable based on your income, expenses, and total debt. A feasible proposal is key to gaining creditor approval.

How We Can Help

At Apply for IVA, we specialize in helping UK Citizens navigate the IVA process. Our expert team will guide you through every step of the application and help you assess your eligibility. If an IVA is right for you, we’ll work with you to develop a repayment plan that suits your financial situation.

Ready to Take the Next Step?

If you meet the criteria for an IVA and are ready to take control of your debt, we’re here to help. Contact us today for a free consultation, and let us help you regain Maintaining Financial Stability and move towards a brighter financial future.

#IVA #DebtHelp #DebtRelief #UKCitizens #BankruptcyAlternatives #ResolveFinancialStress #MaintainingFinancialStability #ApplyForIVA