IVA eligibility - Minimum criteria

An IVA not just helps you in keeping your assets, but also stops your creditors from taking any legal action against you. However, whether you are eligible enough to opt for an IVA that entirely depends upon your financial and personal circumstances.

For instance, your personal debts should be more than £15,000 with a minimum of 3 different creditors. You should be in a capacity to repay every month, the amount of which will be based on your debt amount and the surplus income you will have.
Usually, an amount of £250 a month should be repayable for at least five years.

If you follow the below requirements, you are more likely to have your application approved successfully by a supervisor (an IVA company or an Insolvency Practitioner) who will then inform you if an IVA is the right option in your case.

IVA eligibility requirements:

  1. You must be a resident of England, Northern Ireland or Wales where IVAs are available. In Scotland, an equivalent arrangement called Standard Trust Deed is applicable.
  2. You should be insolvent to be able to make any payments on loans or credit cards. In that, you need to submit proof of your financial situation, for e.g. pay slips, creditor bills, property value, if applicable, etc.
  3. You have to declare unsecured debts of minimum £15,000. Unsecured debts considered under an IVA agreement include catalogues, credit cards, overdraft, store cards, hire purchase agreements and any outstanding balances after repossession of your property or vehicle. Personal debts on account of HM Revenue & Customs are also considered.
  4. You ought to have regular income, to be able to make reasonable repayments through the IVA as an option and become free from debts gradually. During the IVA term, you need to stay employed.

It should be noted that secured debts such as mortgage arrears and vehicle HP are not included in the IVA process.

Remember an IVA is a legal binding agreement. We strongly recommend you to speak with an expert, understanding all the legal requirements for this debt solution is an absolute necessity.

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