Any person can offer IVA proposals to their creditors provided they are insolvent. It is not necessary to own a home or indeed any other asset such as a car or boat.
If you cannot offer a lump sum to your creditors, you do need to have some level of regular disposable income to offer to them.
Disposable income is the money you have left over when you have paid all reasonable living costs both for yourself and for any dependants you may have. The amount of disposable income you have will depend entirely on your circumstances. Your income for example will be comprised of your take home pay from your employment, benefits, pensions, tax credits, dividends, child allowances, lodger rental and so on. Reasonable living expenses will for example include the cost of rent, council tax, utilities such as water, gas and electricity, food, housekeeping, telephone and mobile, TV & internet, life insurance, house insurance, vehicle running costs (HP, fuel, parking, car insurance, road tax, repairs and servicing), clothing and footwear, optical dental and medical needs, as well as all the normal costs incurred in supporting your family.
Obviously if your reasonable living expenses use up all of your income, then you will be left with no disposable income and thus you will have nothing to offer your creditors in an IVA. On the other hand, if you have a reasonable amount of disposable income and your debts are not excessive, creditors can expect to be paid a reasonable dividend in an IVA. The fact that you are not a homeowner should not have any effect on the attitude of your creditors when they consider whether to accept your IVA proposals or to reject them. If you were to be made bankrupt, creditors would generally receive a much lower dividend and in many bankruptcy cases they receive no dividend at all.
Creditors have indicated what they consider to be reasonable living expenses for debtors proposing an IVA, whether they are single, married or co-habiting, with or without children. There is no satisfactory definition for what creditors would deem a reasonable dividend. It really does depend on the amount of the debts and the amount of disposable income. Remember an IVA is generally geared to people with debts in excess of £15,000. It would be difficult to gain the approval of creditors for an IVA if the monthly disposable income was less than £200, but there are exceptions. While there is no minimum dividend required by law for an IVA to be proposed, creditors nowadays have great difficulty in accepting IVAs where the estimated dividend is lower than 25p in the £, although in exceptional cases a much lower dividend may be accepted. Some creditors set their minimum acceptable dividend much higher, perhaps at 40p in the £. Each case is assessed on its own merits. More than 75% of voting creditors must accept your IVA proposal for it to be approved and creditors take many factors into account in making their decision whether to accept or reject. If you do not own a home, it should not discourage you from offering an IVA to your creditors and it should not be a barrier to their acceptance of your IVA.
To explore this option further please contact us at National Debt Relief.