How likely is it that an IVA will be accepted?

Creditors will only accept an IVA if the amount offered is reasonable

We receive a lot of calls and emails from the public asking; "How likely is it that an IVA will be accepted?".

Please note that Money Advice Direct will only recommend an IVA if the IVA team feels the creditors will accept it. Money Advice Direct’s IVA Insolvency Practitioners

The creditors will only accept an IVA if the amount offered is reasonable.

In practice, how likely is it that an IVA will be accepted?

In practice most creditors expect at least 25% of their debts back over a maximum of 5 years. The creditors look at the debts income and expenditure account in details and expect as much of the disposable income as possible. Disposable income is money left over after all reasonable living expenses have been met. The IVA creditors expect you to be honest and fair with the expenses because they know what is a reasonable amount of money to live on.

The amount required to successfully propose an IVA usually between 25-40%. There are certain creditors, such Paragon, Northern Rock, HSBC, RBS Group, M&S Money, HBOS, and First Direct who require specific dividends over the 5 years. In the main, most creditors would look to at least 25% of their money back through the IVA, however the Insolvency Practitioner will be able to assess the latest requirements of the creditors involved before putting forward the proposal.

IVA criteria

Since the introduction of IVAs the IVA team at Money Advice Direct 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.

In the early days, in the late 1980’s and early 1990’s, 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 advice 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 are considering an IVA and want to know how likely is it they'll accept it and understand how it can help you please complete the following form or telephone freephone 0800 074 6918.

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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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How likely is it that an IVA will be accepted?

Creditors will only accept an IVA if the amount offered is reasonable

In practice, how likely is it that an IVA will be accepted?

IVA criteria

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

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