In The Early Days, When The Law Was New An IVA Was A Very Simple Document

Category: Finance, Credit.

Since the introduction of IVAs the IVA teams at many of the countrys top insolvency companies have dealt with over two hundred thousand IVA cases. In the early days, when the law was new an IVA was a very simple document.

In this time they have developed the most up to date and complex systems which can provide the exact criteria required to accept an IVA. To get an IVA accepted a client just showed that he was offering more that would be offered that if he or she was to go bankrupt. Nowadays the criteria required to accept an IVA couldnt be more different especially because all the major banks leave the decision to accept an IVA with professional representatives of large accountancy firms such as Price Waterhouse Coopers and KPMG and in some cases ask them to block vote against any IVA proposal. However with floods of applications creditors soon objected to this. The typical IVA criteria required to accept an IVA are now the following: Debts greater than 15, 000. 3 or more creditors. The Criteria required to accept an IVA must be separate institutions although such as Halifax and Bank of Scotland being part of the same group they are treated as separate creditors.

This cannot be three debts to the same bank such as Barclaycard visa, Barclay Loan and Barclays overdraft. Disposable income over 200 per month, assets to release or a 3rd party to contribute into the arrangement. Many IVA cases fail because applicants cannot afford to make a decent monthly payment. 25p in the pound is becoming increasingly rare as an acceptable amount with most creditors looking for 30p and above. You must be able to pay creditors at least 25 pence in the pound dividend. You should have a regular income stream. Some IVA cases fail because applicants income is irregular or unreliable, when making an application be sure to use the amount you can rely on coming in.

Those who have some good months and some bad months will have to make sure they can make a regular payment. Applicants must be able to show they have allowed for reasonable necessary living expenses such food, travel costs, utilities, council tax etc. Some IVA cases fail because applicants spend too much on car hire purchase payments. Creditors are constantly criticising those who state too much or too little for food. The insolvency practitioner must make a positive nominees report which portrays a professional opinion as to whether the Individual Voluntary Arrangement- IVA is a bonafide offer. If these criteria are met, the IVA team will explore all available debt solutions and recommend an IVA where appropriate.

He or she will decide whether the applicant is going be reliable and perform the IVA successfully. However, if any of these criteria cannot be met, the Company is unlikely to recommend an IVA. In these circumstances the Company may recommend an alternative solution for the debtor which would typically be debt management or debt counselling reputable debt management company.

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