Debt of more than £15,000

The IVA is designed to deal with more serious debt problems. For this reason, to consider an IVA, your unsecured debts will normally have to be over £15,000. If your unsecured debt is lower than £15,000 you may want to consider one of the alternative solutions such as a Debt Management Plan.

An IVA, may not always be the right solution for debts over £15,000. If you do not have a property (perhaps you are renting your house) then other ways of resolving your debt problem may be worth consideration . For example, if you enter into an IVA you will be bound to repay into the arrangement for 5 years where as if you had declared yourself bankrupt, you would only need to make payments for 3 years.

You must be insolvent

Normally if you have a debt problem you will be struggling with your monthly repayments. However, before doing an IVA you will be asked to look very careful at your monthly expenditures to make sure that you are not overspending in any areas and that your expenditures are reasonable. If you are truely struggling to pay your debts, it is extremely likely that you are insolvent.

In addition, you will have to look at any equity you have in properties that you own. If the total of your equity is far greater than your debt, then you are not classed as insolvent and you may not be allowed to undertake an IVA.

You must have sustainable income

No-one can be sure that their income will remain stable for ever. However, before you enter into an IVA you should be able to prove that you have a steady form of income which allows you to make a minimum monthly payment to your creditors. Generally the minimum amount your will have to pay each month into an IVA is between £150 - £200. You will have to prove your income with wage slips, benefits statements, or or company accounts if you are self employed.

Lump sum settlement

If you do not have a steady form of income and can not afford to make monthly payments, you may still be able to carry out a full and final settlement IVA if you can make available a lump sum of money. 

You must proove your expenditure

You will normally have to prove your monthly expenditures with paperwork (such as a mortgage or rent statements and copies of recent bank statements).

You must be resident in England / Wales / N Ireland

You must be resident in England, Wales or N/Ireland. If you live in Scotland, you will not be eligable for an IVA. You will need to consider a Debt Arrangement Scheme (DAS) or Protected Trust Deed

 
More Information: Expert articles

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