IVA Eligibility

To be eligible for an IVA you must meet this criteria:

  • Have £6,000 or more of unsecured debt (i.e. credit that is not taken out against an asset such as property)
  • Owe this money to two or more creditors
  • Be a resident in England, Wales or Northern Ireland in order to be eligible for an IVA.
  • Have a steady income which will allow you to make consistent monthly payments of at least £85 per month

The above criteria is set by us and may not be the same for all providers.

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Change of circumstance

If your IVA is approved, it will be subject to the terms agreed by yourself and your creditors.

However, during the 5 year process, it’s possible that your personal circumstances may change. This does not mean that your IVA will be void, but it is important that you let your insolvency practitioner know of any changes as early as possible.

Some changes in circumstances might be:

  • A change in income
    You might have a new job where your pay increases, or alternatively your income may decrease.
  • Windfalls
    During the IVA, you may receive a lump sum of money through a windfall, for example inheritance or work bonuses.
  • Unexpected events
    Things change, and something might happen that means you do not have the same level of disposable income available to pay towards your IVA.
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Will my IVA be affected?

It’s important not to stress if you do find that your circumstances have changed or are going to. There are a number of ways that this can be dealt with if you’re on an IVA.

Once you inform your Insolvency Practitioner of how your circumstances may be changing, they will negotiate with your creditors for you.

They may be able to agree on one of the following options:

Reduction in payments
If your financial circumstances worsen, or you are no longer able to afford the agreed monthly amount, then your creditors may agree for you to pay a reduced contribution that is still affordable to you.

Payment holidays
If you are struggling to keep up repayments, but do feel that you will be able to get on track at some point, then a payment holiday may be an option. Your Insolvency Practitioner will request this of your creditors and if accepted, your monthly payments will be paused until you can start paying again.

Contributions
If your situation changes for the better, then you may be asked to contribute in different ways. You may be able to pay a lump sum to pay off the IVA and end it early, or alternatively your monthly contribution may increase to reflect your affordability.

In any of the above situations, your Insolvency Practitioner will negotiate on your behalf with your creditors, to appeal for the modifications to the IVA.

In an event that your creditors do not agree to alter your IVA, then the IVA will ‘fail’.

Can an IVA fail?

It’s possible for an IVA to fail, although only a small percentage of them do – this can be due to a few reasons:

2. You do not stick to the terms of the IVA

Your circumstances are reviewed every 6 months, to ensure that you are still able to afford the IVA. If any changes have occurred in this time that haven’t been reported, then there’s a possibility that the IVA will fail.

Depending on the severity of the unreported change, your creditors may be free to withdraw from the IVA, meaning it will fail.

In this case, your creditors or Insolvency Practitioner may apply for you to be made Bankrupt.

Other ways you might breach the terms are:

  • You do not keep up with your monthly repayments
  • Borrowing money over £500 without informing your Insolvency Practitioner
  • Not co-operating with your Insolvency Practitioner throughout the duration of the IVA

2. Your creditors do not agree to any modifications
If your circumstances change and you have let your Insolvency Practitioner know, then they will contact your creditors to discuss modifications to the IVA.

It is up to your creditors to agree to the changes or not. If they do not agree, then the IVA will fail, however, this is a much rarer case as creditors aren’t likely to reject requests without just reasons.

Did you know...

  • The IVA has become the most popular personal insolvency product in the UK to date
  • 70,000 UK consumers decided an IVA was the best solutions last year
  • If you are a homeowner, an IVA will protect you
  • As long as 75% of your creditors agree to the IVA, all of your unsecured debts will be included
  • You can apply for an IVA whether you’re employed, unemployed, self-employed, or retired
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