Eligibility Criteria For an IVA

IVA (Individual Voluntary Arrangement) was introduced in 1986 as an alternative to bankruptcy, supporting the interests of both the borrower and the creditor. An IVA may include any type of unsecured debt like credit cards, personal loans, overdrafts etc. The main benefit of IVA is that the interest on the loan is frozen since you only need to pay a certain percentage of your debts and not the whole amount borrowed.

Your IVA eligibility depends on your personal as well as your financial circumstances. Some simple criteria are given below to help you get an idea as to which alternative to go with:

1. You have to be a resident of England, Wales or Northern Ireland. IVAs are not available to people not residing in UK.
2. Your personal debts must be above £15,000 and is not meant for smaller amount of debts.
3. Your IVA must spread among 3 or more different creditors.
4. You need to be insolvent and in some cases, proof of your financial documents is required. You cannot have any material assets to pay off your debts.
5. You must be in a position to make reasonable monthly payments to your creditors. Usually it is a minimum of £250 per month.

Thus an IVA acts as a legal binding contract between you and your creditors thereby saving the interests of both the parties. It is suitable for people with poor credit history and who are unable to pay off their debts but have at least a stable source of income so as to make considerable monthly payments.