Who is suitable for an IVA?
What makes an IVA suitable for your needs?
We receive a lot of calls and emails from the public asking; "who is suitable for an IVA?"
So - who is suitable for an IVA?
In practice it is likely that this would mean cases meeting the following conditions:
- Income for an IVA to be suitable. A person suitable for this sort of IVA should have a regular income
- i.e. be employed, or have a regular pension.
- Size of debt for an IVA to be suitable. The minimum should be £15,000, there is no and maximum thresholds to the viability of providing the IVA)
- The IVA is suitable for people in occupations which would be put at risk should the debtor be made bankrupt. ( accountants, legal professionals, Police Officer, employees if HM Armed Forces
- Age for an IVA to be suitable. This is not a constraint although the client must be able to show he/she will survive the IVA term.
- Creditors for an IVA to be suitable. Here there should be 3 or more lines of credit, and 2 or more creditors (i.e., different lending institutions/groups [HBOS, RBS, Capital One etc).
- Home equity for an IVA to be suitable. An IVA is Suitable for home-owners, and non home-owners. Where a home is owned, it should be included in the IVA proposal at current value for potential equity release (if affordable) during year 5 but before completion of the IVA term (unless the exceptions outlined below apply). Cases not meeting the above conditions may still be suitable for an IVA solution, but it is less likely that they will be suitable for this standard treatment.
- An IVA is suitable when someone is unable to pay off their debts but does not want to file for bankruptcy. It can be an attractive option to all parties including the creditors as often it presents for them a better result than under bankruptcy.
- An IVA is suitable when the debtor has a property they need to protect from their unsecured creditors. The reason for this is once the IVA has been agreed, and so long as the debtor adheres to the IVA terms, the unsecured creditors are unable to force the sale of the property, instead they settle for as much equity as can be released via a standard remortgage
Who is not suitable for an IVA?
Any of the following qualities could indicate the case is not suitable to be treated as a IVA:
- An IVA is not suitable where there is uneven/unpredictable income. A person with more than 20% of their income coming from bonuses or commission, or an unemployed person.
- An IVA is not suitable where person is on benefits. A a debtor with more than 20-25% of their income coming from benefits.
- An IVA is not suitable where there are disputes. A debtor where there are known material disputes in relation to the debts.
- An IVA is not suitable where the person owns investment properties. A person with investment properties will have to offer the equity from the properties.
- An IVA is not suitable involving early settlement by home equity release. Where a full and final settlement is possible in year 0 (of over 65% of the total debt).
- An IVA is not suitable where the person has low surplus income. If the person has a very small surplus income (i.e. 5years of dividend payments amount to less than 20% of the outstanding debt) and there is significant equity in their home.
Many people will have debt problems and could be suitable for an IVA. The IVA unit at Money Advice Direct will carry out a detailed financial overview of your situation to establish whether an IVA is suitable .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.
IVA Guide
- What does it mean if my IVA is not approved?
- What are my options if my IVA is not approved?
- My IVA has been approved, what do I do next?
- My IVA has been approved subject to modification – what does this mean?
- How do I make my IVA contributions?
- My IVA proposal included the provision that I had to sell/realise other assets – what do I need to do?
- I am receiving letters and emails from companies offering me a better solution than an IVA - what are these solutions?
- What do I do if my monthly IVA contribution will be late?
- How do I deal with my creditors once I’m in an IVA?
- How do I deal with additional creditors now that the IVA has been approved?
- What happens if I miss an IVA payment?
- The bank has not transferred my IVA payment - what do I do?
- What happens if I do not inform my IVA supervisor that I can’t make the contribution?
- I'm struggling to make the monthly IVA payment what should I do?
- I've received a 'Notice of Breach' from my IVA supervisor - what does this mean?
- What happens if I’ve missed IVA payments or received a notice of breach and there is no solution?
- Is it possible to finish or settle my IVA early?
- How do I settle my IVA early?
- What is the process involved when offering an early IVA settlement?
- Why would I vary the terms of my IVA?
- What does the IVA variation process involve?
- What happens when the IVA variation process has been approved by creditors?
- What happens when the IVA variation process has been rejected by creditors?
- How does an IVA end?
- Will I receive any correspondence when my IVA has completed?
- If one of my debts has been excluded from the IVA, am I liable to pay the debt after the IVA has completed?
- When does a creditor debt claim have to be received by when completing an IVA?
- What happens if any additional debt claims is received during the IVA closure process?
- How do my creditors get their money in an IVA and what are the IVA dividends?
- Does the money in my IVA account earn interest and if so where does that interest go to?
- Do I get a report or certificate stating the IVA has been completed?
- How does an IVA fail?
- What is the effect of IVA failure or an IVA failing?
- What happens after an IVA fails?
- What are the costs of an IVA?
- Who pays for my IVA?
- What is the IVA process?
- Who takes care of my creditors?
- Will an IVA make me debt free?
- How an IVA benefits my creditors
- Lifestyle changes during an IVA
- Advice on living with an IVA
- Will creditors contact me?
- Will I my IVA fail?
- Completing an IVA
- Getting credit after an IVA
- Can an IVA make me debt free?
- How to boost my credit rating after an IVA?
- IVA vs debt management
- IVA vs bankruptcy
- IVA vs debt consolidation
- IVA vs administration orders
- IVA pros and cons
- IVA definition
- What is an IVA?
- Why choose an IVA?
- Who is suitable for an IVA?
- IVA benefits
- IVA stages
- False IVA adverts
- IVA compared to Bankruptcy
- IVA compared to debt management
- IVA compared to debt consolidation
- IVA compared to administration orders
- How the IVA got so popular and famous
- Things you should know and do before you start an IVA
- Will an IVA make creditor phone calls stop?
IVA's
The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.
In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]
What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
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DANGER
Due to the tremendous demand for debt consolidation services the United Kingdom is now overloaded with debt management companies that contain misleading information. [more...]