What percentage of IVA's are blocked by creditors?
There are certain creditors that will block an IVA
We receive a lot of calls and emails from the public asking; "What percentage of IVA's are blocked by creditors?".
Please note that Money Advice Direct have a 98% IVA success rate….the highest in the UK.
Money Advice Direct has been offering IVA advice since the IVA procedure was introduced in 1986. Since then the team has built up a copious amounts of knowledge on Individual Voluntary Arrangements (IVA). To this end the IVA Unit do not take on cases or clients whom we feel their IVA would be blocked by the creditors.
There are certain creditors that block an IVA if a minimum dividend is not met. Banks such as Paragon, Northern Rock, HSBC, RBS Group, M&S Money, HBOS, and First Direct are known to require specific dividends over the 5 years. In the main, most creditors would look to at least 25% of their money back otherwise they may block the IVA, however the Insolvency Practitioner will be able to assess the latest requirements of the creditors involved before putting forward the proposal.
If a debt is quite new, then there is a risk that a creditor will block the IVA proposal. If the creditor thinks, that the debtor obtained the money when they knew they couldn’t afford to repay it, then this could be seen as having fraudulently obtained money and so block the IVA.
Unwritten rules on Blocked IVA proposals
Our extensive research in to the IVA sector has revealed that some creditors admit do not read the entire IVA proposal in full, instead they just refer the amounts they receive on income and expenditure section. Please note that due to the amount of IVA proposals being put forward the sad news is that an IVA can be blocked solely on a commercial basis.
HSBC’s IVA criteria
HSBC bank now accepts IVAs only if at least 40p in every pound is repaid
Student Loans Company IVA criteria
Student Loans Company insists on at least 80p in the pound is repaid
Northern Rock IVA criteria
Crisis-hit Northern Rock rejects most IVA applications unless strict criteria are met.
Other banks IVA criteria
- Abbey, Barclays and credit card giant MBNA reject proposed IVAs from customers on benefits.
- Some refuse IVAs where borrowers are thought to be too old.
- There are cases when there is an offer to pay 45p in the pound, only for the banks to then sell on the debt for less than 10p in the pound.'
The tough criteria that providers are taking means many people will either be forced into bankruptcy or informal debt management plans where interest payments are not frozen. For some, it will take up to 40 years to clear their debts.
If you have would like know under what percentage of IVA’s are blocked by creditors please complete the following form or telephone 0800 074 6918.
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- Does an IVA cover all of my debts? |
- What is the difference between a secured and unsecured debt? |
- Do creditors have to accept an IVA? |
- Can an individual creditor refuse to accept an IVA? |
- Will the IVA prevent my creditors taking further recovery action? |
- What if my circumstances change whilst in an IVA? |
- Can I cancel the IVA once it is set up? |
- What happens if I just stop paying into the IVA? |
- How long does it take to set up an IVA? |
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- Can a creditor take further recovery action before the IVA is approved? |
- What happens if the IVA is not approved? |
- What Does IVA Stand For? |
- How do I work out how much I can afford to pay per month in to an IVA? |
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- Do I have to attend IVA meetings, or can this all be done by post? |
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- Are all creditors forced to accept the IVA majority decision? |
- What happens if the creditors don't like the IVA deal? |
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- IVA - Individual Voluntary Arrangement |
- I've buried my head in the sand, now I've got a bankruptcy petition hearing next week. Can I do an IVA at this late stage?
- Will an IVA really write off all of my debts?
- Will I live in poverty for the duration of the IVA? |
- What if I win the lottery whilst in an IVA? |
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- Is an IVA more expensive than just going bankrupt?
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- I run a business. What will happen to my business in an IVA?
- Will my partner have to contribute to my IVA?
- My partner and I have joint debts. Can we lump them all together in the same IVA?
- What happens if I'm unable to keep up with the IVA payments?
- What happens at the end of the IVA arrangement?
- Are there any upfront fees with an IVA? |
- Why should I consider an IVA over bankruptcy? |
- What are the advantages of an IVA over a debt management plan? |
- How will an IVA Improve my life? |
- Is there immediate relief if I do an IVA? |
- How much debt do I need to do an IVA? |
- What types of debt can an IVA deal with? |
- Can utility bills be included in an IVA? |
- Will an IVA stop collection calls? |
- Will an IVA freeze my interest rates? |
- Will I have to sell my house if I do an IVA? |
- Will an IVA stop home repossession? |
- How will An IVA affect my home equity? |
- Can I keep my car if I do an IVA? |
- What assets might an IVA affect? |
- Will an IVA be reflected on my credit file? |
- Do I need to include all my creditors in an IVA? |
- Can I apply for credit while I'm in an IVA? |
- Will I need to change bank accounts in an IVA? |
- What will my monthly payment be on an IVA? |
- What if I am unable to keep up with my payments in an IVA? |
- Can my IVA payments go up? |
- Under what circumstances can I reduce my IVA payment? |
- Who will know if I do an IVA? |
- Will my landlord need to know if I do an IVA? |
- I've decided to do an IVA, should i stop paying my creditors now? |
- Will an IVA affect my employment or my ability to get a job? |
- I'm in an IVA and I've lost my job, what can I do? |
- What situations would prevent me from doing an IVA? |
- I've been told I can't do an IVA, what should I do? |
- Can I exit out of my IVA before five years? |
- Under what circumstances can an IVA proposal be rejected? |
- What percentage of IVA's are blocked by creditors? |
- What happens if my IVA fails? |
- What if I can't remortgage as per my IVA proposal? |
- My husband and I are considering an IVA as a solution to our £25,000 debt |
- What happens if I change from being employed to self employed during my IVA? |
- If my partner enters an IVA will I have to sell my car because it is registered in my name? |
- What happens if my income rises during an IVA, would the creditors want all of the increase? |
- What is the minimum level of debt for an IVA? Is it 12000 or 15000 pounds? |
- Can I keep my home if my IVA is accepted? |
- Will I have enough money to live if I go for an IVA? |
- Information on the IVA procedure in the UK |
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- Can I include HM Inland Revenue and Customs (TAX) debt in an IVA? |
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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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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...]