Many IVA advisors would tell you that you must have unsecured debts of 15,000 or more, should have three or more creditors and that you should be able to afford to pay £200 each month towards your unsecured debts.
Well the truth is that none of these are legal criteria. They are general rules of thumb that are used in the industry to help determine whether or not your creditors will accept you for an IVA.
Here are the main criteria that your creditors will be looking for when there is an IVA proposal:
- Your unsecured debts must total 15,000 or more, be aware that this figure isn’t set in stone, but very few will consider an IVA pass with less amounts of unsecured debts.
- The return your creditors receive in an IVA should beat the return in bankruptcy
- What your creditors will receive over the life of the IVA has to meet the minimum creditor dividend. This is the amount of money that your creditor will receive as a percentage of the total amount of unsecured debt that is owed. Generally this is about 15%, this percentage can vary which depends on various factors including the size of the debt, bankruptcy return and also how quickly your creditors will receive their money.
- The person who wants to enter into an IVA must be a resident of Wales, England or Northern Ireland.