I am on Income Support – do I qualify for an IVA?
 
Unfortunately not, as the Individual Voluntary Arrangement is a legally binding agreement between you and your creditors, which is brokered by a dedicated Insolvency Practitioner. If you are claiming Income Support, you cannot guarantee your creditors that you will be able to meet your repayment obligations as your eligibility for income support could change or the support could be withdrawn. This calls into question your ability to meet the minimum payment required by the IVA and shakes creditor confidence.

In order to qualify for an Individual Voluntary Arrangement, 75% of your creditors will need to vote in favour of the IVA proposal drawn up by your Insolvency Practitioner. This percentage of your creditors is not defined by headcount or number of creditors but instead by the percentage value of your total debt. Essentially, that means if you owe more than 25% of your total debt value to any single creditor, they have the power to veto the entire Individual Voluntary Arrangement. As you cannot guarantee your income support, you’ll not be able to guarantee your creditors that you can make the repayments.

So, income support will affect creditor confidence and they won’t agree to an arrangement that you can’t guarantee to uphold. The legality of the IVA not only serves to your creditors’ interest but yours too. It means that the goal-posts can’t be moved once you’ve reached an agreement. If you’re on income support, we’d recommend you go for a petition of bankruptcy or an informal repayment plan and you can find out more by calling us or filling our online application form.

For more information see:
IVA pros and cons




 
 
     

 

 
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