Can I Do an IVA?
There was a time, when IVAs were first introduced, that it was easy to apply. If you could show a creditor that you would be paying back more this way than if you were made bankrupt, many would accept.
However, now many of the larger banks ask major accountancy firms to consider the applications for them, resulting in much stricter rules to be met if you want to be accepted. If you want to qualify for an IVA today, you must meet certain criteria.
The key to an IVA is the amount that you owe. In order to be eligible, you must have debts totalling at least £10,000 (although some IVAs require £15,000 as their minimum quota) and this must be owed to at least two different creditors.
IVAs will also only be considered if you are insolvent. To be insolvent, you need to be unable to make all the repayments on your debts each month or have insufficient assets to repay your debts or liabilities.
However, you do need to have a reliable income if you want to apply. If your job results in having better months than others - such as if you are on commission, then you need to make sure the amount you guarantee to bring home each month will still meet your repayments. An IVA will fail if you cannot meet the repayments.
You must appoint an Insolvency Practitioner who will act has your nominee. They will then deal with every aspect of the agreement for you. At the start of the IVA, they will consider your financial position and, if they feel that you will be able to make the required repayments every month, then they will propose it for you. Essentially, they are telling your creditors that, in their professional opinion, you are a reliable.
IVAs cannot be proposed with if you have already proposed one - and been rejected - in the last year.