The requirements for getting an Individual Voluntary Arrangement are really quite flexible. If you’re struggling to pay your debts an IVA may well be an appropriate option for you, but does depend on the details of your case.
Advice
In general, the best first step in establishing whether or not you’re going to be able to get an IVA, is to speak to a licensed professional. This is where Insolvency Practitioners come in. IPs specialise in matters of Insolvency, and are the only professional individuals who can legally take forward an IVA for you.
Amounts
Generally, IVAs are used for individuals (rather than companies) who have personal debt of over £15,000. Also, the amount you agree to pay monthly as part of an IVA is not strictly restricted to a set level. In most cases, the payments will be at least £200 although this does vary according to both your debts and your income.
Your finances
You will need to be able to show that you can realistically afford the payments as part of an IVA. It is hugely important that you agree to the right level of payments when your IVA is proposed. Your Insolvency Practitioner will help you to work this out and to come to an agreement that suits you. In order to do this they will have to have a good look at your finances.
Your IP will therefore need to see details of your income, assets and all of the debts that you currently have. On the basis of this information they will be able to give you an overview of what your options are, of which an IVA may be only one. An IVA is basically meant to help you to make payments while still maintaining a good standard of living, i.e. it shouldn’t leave you with too little money to live on.
Creditors
Once you’ve worked out what terms you want to propose as part of an IVA, it will then ultimately be up to your creditors to decide whether or not to accept it. For this reason it is never really possible to tell whether you will in fact get the IVA. It is generally the case that creditors tend to be amenable to IVAs as the alternative for many people is often bankruptcy, in which case the creditors will likely receive back far fewer of the borrowings they are owed.
An IVA is a way to strike a balance between you avoiding bankruptcy and the creditors retrieving at least some of the debt back, and so needs to appeal to both sides involved.
Whether or not you’ll be able to get an IVA is impossible to predict. If you’re struggling with your debts and feel you simply can no longer keep up with them, the first step is to speak to someone who can tell you what your options are and advise you of the pros and cons. Remember that any IVA you agree to should help you as well as your creditors.