Debts of at Least £15,000 ?

Not Entirely True. The higher the level of debt, but more importantly, the more you can contribute each month, the more realistic your IVA proposal.

There is nothing in UK insolvency law saying there is a minimum level of debt for an IVA. Many IVA companies state this as being the minimum, but it's their minimum due to the fees they charge to creditors. Some won't consider an IVA for less than £20,000 of debt.

We routinely get IVAs approved for £12,000 to £15,000. However with debts towards the lower end of the scale, only a smaller percentage of the debt can be written off.

Under exceptional circumstances we have arranged IVA for under £10,000. See IVA costs for further details.

We welcome IVA enquires for any level of debt in any circumstances. If we, with our low fees, can't get your IVA approved, then neither could anyone else. If your circumstances, by level of debt or otherwise render an IVA not possible, then we could offer debt management or recommend bankruptcy as an alternative.

you must be insolvent.

This means that you can't repay your debts by the terms of current contractual agreements, and your debts are more than your other assets.

You will not be eligible for an IVA should your personal wealth by way of personal savings, property or other assets be worth more than your debts.

No worse than Bankruptcy for creditors

The whole idea of an IVA is that it is preferable to bankruptcy for all parties.

The debtor avoids bankruptcy while creditors get back no less of their money as they would via bankruptcy.

The advantage of an IVA for creditors is that their own costs are lower and they normal get payments from your income for 60 months.

30% minimum Dividend for creditors

Creditor must recoup at least 30% of their money. This 30% does not include fees changed by the IVA company to the creditors, so in effect they can be prepared to forgive more than 70%.

Some creditors such as HSBC are currently demanding a 40% return, meaning all creditors in any IVA involving HSBC must be offered at least this.

Typically an IVA writes off 50% of debt, not the 70% headline maximum seen in most advertising.

IVA payments must be affordable.

Creditors must be confident you are able to maintain the agreed repayments for a full 5 years or whatever is the agreed duration of the IVA. No one can predict the future, but from the offset it is essential that:-

• You have a reasonable stable and on going income.
• You can afford basic domestic needs without living on the bread line.
• You have given due consideration to the impact on your finances of life events such as a new child.

Recent periods of unemployment, working through a probationary period in a new job or self-employment without proper accounts are reasons why an IVA may not be possible for you at this time.

If your creditors get a whiff of drug or gambling problem or something else that will impede your ability you make continuous payments, this will adversely effect your chances of approval.

Living within reasonable Means

Monthly IVA contributions from income are calculated by determining disposable income once essential living costs have be paid. You must be able demonstrate that you are not spending excessively and are attempting to maximise payments towards the IVA. The following are some common compromises you can make:

• Moving to more modest rented accommodation, or taking in a lodger in the case of homeowners.
• Cutting down on non essentials such as mobile phones and satellite TV.
• Limit social expenditure.
• Cut down on cigarettes and alcohol.
• Not spending significant money on hobbies and pastimes.

Hire purchase payments towards a essential items such as a car are acceptable. However you will be expected to increase payments into the IVA once such HP payments are completely and you have more money available.

Demonstrate Proof Of Circumstances

An IVA proposal is a legal document and is required to be accurate with a high degree of confidence. An IVA proposal contains details of assets, income and monthly expenditure. You must provide suitable evidence to support you proposal such as:-

• Housing Agreement - Mortgage or Tenancy
  A recent statement is required to show how much you pay for your accommodation.
• At least one recent wage slip
• At least one recent bank statement (For all parties)
  To confirm your payments.
• Current year's council tax bill (Copy)
  Include details of arrears separately if applicable.
• Proof of Identification
  We must see a copy of your driving license or passport
• Award letters for all benefits in payment
  This can be requested from the Benefits Agency or Inland Revenue.
• HP agreements and secured loan
  We need to include everything in your income and expenditures.
• Latest statements / proof of balances for all other unsecured credit
  Credit cards, HP, catalogues etc.
• Letters from solicitors or debt collectors.
  Any paperwork relating to your debt is important to your IVA application.