IVA qualification

IVA Qualification is not secure if you do not meet certain criteria. If you are planning to apply for an Individual Voluntary Arrangement (IVA) to eliminate your unsecured debts, the first question that you will have in your mind is “Do I satisfy all the requirements?’.

In the beginning when IVA was relatively a new debt solution, it was very simple. Anyone with any level of debt was allowed to apply for an IVA. It also had lesser drastic effects as compared to Bankruptcy. Therefore, more and more people started opting for it to get rid of their outstanding debts.
This situation was not very desirable for the Creditors. Now the Creditors have imposed certain qualifying criteria to keep the volume of application for the IVA under control.

This guide describes the criteria for an IVA qualification, however, these criteria are negotiable and your Creditors have the right to accept or reject your IVA proposal. Every Debtor has a different situation so each case should be treated on its own merits, we strongly advice you to have reviewed your personal circumstances by an accredited debt advisor or registered debt charity before applying. But a simple answer to your question in a broader perspective is:

Yes you do qualify for an IVA only:

If the amount you owe is over ₤15000. The Creditors would not accept an IVA for an amount below this because they are not able to recover enough money.

If you owe this debt to three or more Creditors. But if you owe three different types of loans to one or two Creditors, you do not qualify for an Individual Voluntary Arrangement.
However, if you owe gigantic debts to one or two Creditors, they may still accept your IVA proposal. For example, if you owe ₤25000 or more to two Creditors or you owe ₤40000 to one Creditor, your application could be accepted.

If you are employed. If you are unemployed the Creditors will not be sure whether you will be able or not to make the monthly payments. If you are employed then your IVA is much likely to be successful and Creditors will accept it easily as well.

If you can pay at least 25% of the actual debt owed, after all the costs have been deducted. Creditors will simply deny your request if they do not recover the said percentage through the IVA. This does not include the costs involved i.e. the fee of an Insolvency Practitioner.

If you do not have any realizable assets which could be used to pay off your debt. Your Creditors will never accept an IVA if you own a luxury car that is worth more than the amount you owe. If you have such an asset the IVA proposal may be rejected and you will be forced to opt for Bankruptcy. This also applies to other assets i.e. holiday home or caravan.
Luckily, your personal residence is not at stake and it will not be sold to pay off your debts. However, the equity may be released to the Creditors during the last year of the IVA process.

If you owe unsecured debts including Inland Revenue, VAT, Credit Cards, Hospital or Medical bills, Store Cards, Mail-Order debts, Overdrafts, Finance Companies, Personal Loans, Student Loans etc. Secured debts are not covered by the IVA.

If you do satisfy the above criteria then you may contact an Insolvency Practitioner. However, your Creditors may still not accept your IVA request based on any other reasons.

How it works

The Insolvency Practitioner will assess your situation, do the necessary paperwork, contact the Creditors and inform them of your IVA proposal.

Then he will hold a Creditors’ meeting. Your IVA proposal will be discussed and some modifications may be made as per your Creditors’ demand. Then the Creditors will vote for the acceptance or denial of your IVA.

You must get at least 75% of the votes in the favor of your IVA or it will not be accepted legally.

If your financial circumstances change dramatically during the process of your IVA you may contact your IP. If he is convinced he will come up with a modified alternate proposal known as IVA Variation.
Your Creditors will again assess the proposal and vote in the similar fashion as the original meeting i.e. 75% votes required for acceptance. However if your Creditors do not accept or your IVA fails due to any other reason you may consider other options i.e. Debt Management Plan or Bankruptcy to eliminate your outstanding unsecured debts.

Remember to pay attention and verify that your advisor is a qualified one. Also may sure you have a clear idea of costs and caveats involved during the process.


Qualification for an IVA is not secure unless you are not within certain criteria. To qualify you must have: £15000 of unsecured debt, at least three Creditors and a regular salary.

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