Chartered Accountant
Licensed Insolvency Practitioner

41 Kingston Street, Cambridge CB1 2NU
Tel: 0800 1953605 (Free call) or 01223 367022
Fax: 0844 5048737


IVA - What do creditors expect from it and how likely is it they'll accept it ?

I get the great majority of my IVA proposals approved by creditors, especially in consumer debt cases.  I won't put forward an IVA proposal which in my opinion a creditor would not want to accept, as rejections are bad for both me and my clients.  If I think you're not offering a fair deal, I'll tell you before I've signed you up.

To get an IVA approved, creditors will expect you to put forward a 5 year monthly payment plan from your earnings, together with a remortgage towards the end of the IVA if you own a property with significant equity in it.  You're going to have to put forward the best deal you can, creditors won't accept slack in the budget because they've seen thousands of these things before and they know how much people need to live on.

Until recently most creditors in the consumer debt sector imposed a blanket minimum acceptance criterion of 25 pence in the pound dividend forecast before they'd even look any further at your papers, with a couple of the larger consumer lenders imposing even higher returns up to 35-40 pence in the pound.  Following the introduction of a protocol for IVAs minimum dividend criteria have been relaxed, but 25 pence in the pound is still a useful aiming point as it is not guaranteed that all creditors will follow the protocol.

You will be expected to make a full and frank disclosure of your financial situation and how and why you got there.  The creditors must be confident that your financial situation will not worsen during the course of the IVA.  They will expect you to propose that substantially the whole of your disposable income after payment of your reasonable domestic expenses will be paid to the IVA.  This does not mean that you will be living on bread and water for 5 years, but as you won't be able to afford foreign holidays, a new car or home improvements from your own income, a third party would have to pay for these from his or her income.

Philip Beck is a Chartered Accountant and Licensed Insolvency Practitioner operating since 1996 with substantial experience in undertaking IVAs.

No approval, no fee IVA, click here for details.  Pay nothing until creditors approve your IVA proposal.

Back to Free IVA advice Home Page

IVA Questions and answers.

I have serious debt problems. What are the options ?

How do I know whether an Individual Voluntary Arrangement (IVA) is the best answer to my problems ?

How do I work out how much I can afford to pay per month ?

OK I'm considering an IVA . How does it work ?

Do I have to attend meetings, or can this all be done by correspondence ?

What do creditors expect from it and how likely is it they'll accept it ?

Are all of them forced to accept the majority decision ? I've got one hell bent on making me bankrupt.

What happens if they don't like the deal ?

If the IVA is rejected, do I owe you anything ?

I've buried my head in the sand, now I've got a bankruptcy petition hearing next week. Is there something that can be done at this late stage ?

Will it really write off all of my debts ?

Will I live in poverty for the duration of the IVA ?

What if I win the lottery or get a big pay rise ?

Will it appear in the newspapers ? Will people know about it ? Will I ever be able to get credit again ?

Is an IVA more expensive than just going bankrupt ?

What will happen to my house, furniture, car and domestic effects ?

I run a business. What will happen to my business ?

I'm a professionally qualified person. Will I lose my livelihood ?

My partner has no debts, and I'm living with him/her. Will he/she have to contribute to the IVA ?

My partner and I have joint debts. Can we lump them all together in the same IVA ?

How do you get paid ? What does this all cost ?

There are plenty of Insolvency Practitioners or debt advice companies around. Why should I instruct you ?

What happens if I'm unable to keep up with the payments ?

What happens at the end of the arrangement ?

What other web sites do you suggest I look at for bankruptcy/IVA advice ?

Please note that this site deals only with personal insolvency law in England, Wales and Northern Ireland. By law, only a Licensed Insolvency Practitioner can undertake an IVA for you. If you need an Insolvency Practitioner in Scotland, visit The Institute of Chartered Accountants of Scotland.   Interested in members voluntary liquidation ?

Copyright © Philip Beck Insolvency Practitioner, Cambridge UK, 2005. Bankruptcy and individual voluntary arrangements explained. Free IVA Advice. How to avoid bankruptcy with an Individual Voluntary Arrangement. Debt, debt advice, debt management, debt consolidation.