Why don't I qualify for an IVA?
Insufficient unsecured debts - debts that are secured (mortgages, secured loans, and HP agreements) cannot be included as debts in an IVA. Generally speaking debtors need to have £12000+ of unsecured debts before an IVA becomes an option.
Disposable Income - it may be that after all necessary and reasonable household and personal expenses have been taken into account, the debtor has insufficient funds to make payments within an IVA. A minimum of £150/mth is likely to be needed and some IP's may require a minimum of £200/mth before presenting an IVA.
Insufficient creditors - IVA's might be successful with just one creditor, but the norm is have at least 2 creditors and 3+ lines of credit (e.g. a loan and an overdraft with one creditor and a credit card with another = 2 creditors but 3 lines of credit)
Too many assets - an IVA represents a declaration of insolvency. If a debtor has unsecured debts but has, at least on paper, the ability to pay off those debts by giving up/selling the assets, then an IVA is likely to be inappropriate. This equity in property, endowment policies or savings becomes relevant in assessing whether an IVA is likely to be the right way forward.
Non - guaranteed income - whilst no one knows what the future holds in terms of job security, if it is known that a change is going to take place during the time period of an IVA eg job loss, starting a family, moving house - then it may be deemed inappropriate to start an IVA amidst uncertainty of future finances.
Clearing debts within 5 years - it may be that a debtor has too much disposable income for an IVA. If it is felt that the whole debt can be cleared in less than 5 years then an IVA is unlikely to be workable. For example, someone with £20,000 of unsecured debts may not be able to afford contractual repayments but if they could afford £400/mth then they could afford to clear the debts within 5 years and an IVA becomes unnecessary.
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