IVA qualification - A brief overview

Usually, a minimum debt amount is fixed for a person to qualify for the IVA. In the UK, a person who has debts lower than fifteen thousand pounds cannot enter into an IVA. Mostly the IVA consists of consumer credit debts which may be personal loans, store card or credit card debts. Other types of debts may not be included into the IVA.

Also, it’s essential that the debtor should have some source of income from which he can make the monthly payments to his creditors that are fixed under the IVA. He should also have more than three creditors whom he owes money. The percentage of debt which the debtor is required to pay as monthly installments to his creditors will depend on his current financial status and generally this figure is 50% of the total debts.

If the debtor has any asset then it is expected that he would sell them in order to maximize the monthly payments. Funds in the savings account or pension funds should be used to satisfy the supervisor and the creditors.

The debtor needs to be a resident of England, Northern Ireland or Wales to qualify for IVA. But he can also apply if he is currently working or living abroad. Outside the UK and in Scotland, IVAs are not available.

The debtor should be ready to provide a true account of his income and expenditure account to qualify for the IVA. This should be backed by adequate proof like bills and pay slips along with the bank statements.

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