How to Apply for an IVA

If you find yourself facing insolvency and considering bankruptcy, it’s vital to understand there may be other options for you and your business. Individual voluntary arrangements (IVA’s) are a formal agreement to pay back your debt over time and are an alternative to bankruptcy. Depending on your circumstances and the willingness of your creditors to support the agreement, the solution may be to apply for an IVA.

How Do You Qualify for an IVA?

An alternative to bankruptcy sounds like a beacon of hope in otherwise desperate circumstances, so how do you qualify for an IVA? The first step is to contact an insolvency professional who can assess your suitability for an IVA, apply on your behalf if you are a likely candidate for a successful proposal, and be the intermediary between yourself and creditors from that point on.

You’ll need to provide the insolvency practitioner with a range of paperwork as evidence of your financial situation, assets, debts, and cost of living. You’ll also need to owe debt to two or more creditors.

The insolvency expert will prepare a proposal to present to your creditors. To qualify for an IVA, at least 75% of your creditors must agree to the IVA proposal. Additionally, you must have a certain amount of money ‘free’ each month after expenses (usually around £100 according to Citizens Advice) to repay your debts. There are also fees involved in applying for an IVA, which may be required at the time of application or may be included in the proposal.

How Easy Is It to Get an IVA?

Before you decide to apply for an IVA, it’s important to consider your own commitment to repaying your creditors in a fair and timely manner. The clearer your commitment to repaying, the more likely it is that the majority of your creditors will agree to the proposal. Without 75% of your creditors being satisfied that you’re committed to repaying through the IVA, it will not be possible to get an IVA. Apply with the intent to get out of debt while giving your creditors a fair deal, and you’re more likely to be successful in your IVA proposal. You’ll also need to be completely transparent with the insolvency practitioner as to your assets and what you’re prepared to commit to being sold to go towards repayments.

Do Most IVA’s Get Accepted?

There are varying rates of success in acceptance of IVAs across the UK. Some practitioners have higher rates of success than others. According to Money Nerd, the assessment by a qualified and experienced insolvency practitioner raises the likelihood of acceptance of IVAs, as the practitioner has already assessed whether you’re a good candidate to apply for an IVA prior to submitting the IVA proposal to creditors. If you’re not transparent with the insolvency practitioner and prepared to follow their advice, it may lessen the chances of success in your IVA application.

Can I do an IVA myself?

If you’re wondering can you do an IVA yourself, the answer is no. By nature of how an IVA works, you cannot do an IVA yourself.  To apply for an IVA you need the assistance of an insolvency practitioner who is licenced to act on your behalf with your creditors and in submitting your IVA to the courts to stop further legal action by your creditors. The insolvency practitioner then oversees the IVA for the duration of the agreement and disburses the repayments to the creditors according to the agreement.

Can I Be Refused an IVA?

While an IVA can be a great outcome for recovering from debt and repaying creditors fairly (as well as a portion of the debt potentially being written off at the end of the IVA), not all IVAs are accepted. You will be refused an IVA if 75% of your creditors do not agree to the proposal. Some of the factors in creditors accepting or declining an IVA proposal include the amount on offer, how much money you owe, the value of your assets, the reasons for your debt, and your commitment to repayment.

How Can Irwin Insolvency Help with Your IVA Application?

If you’re considering the best option for your individual circumstances around your debt and potential court action from creditors, contact Irwin Insolvency today for professional and tailored advice. Let Irwin Insolvency assess your circumstances and guide you towards a debt-free future.

Find out more about Individual Voluntary Arrangements (IVA)

What is an IVA?

What is the IVA register?

Can you get a mortgage with an IVA?

IVA pros and cons