How Is an IVA Approved, and Why Might It Be Rejected?
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MoneyNerd introduces enquiries to The Debt Advice Service and may receive a referral fee. For free, independent guidance and help finding a debt adviser, visit MoneyHelper.
This information and enquiry service is not a full financial assessment or a guarantee of suitability or debt write-off. Debt solutions are not suitable for everyone. Fees may apply, and your credit record and assets may be affected. Get advice on your circumstances before choosing a solution.
An IVA proposal can be rejected, and an approved IVA can later fail. These are different outcomes. This guide explains the creditor voting rules for IVAs in England and Wales and what to ask about a provider’s acceptance figures.
Do many IVAs get rejected?
Approval requires creditors representing at least 75% of the value of the debt voting to support the proposal. It is not a vote counted by the number of creditors. Creditors may reject a proposal or ask for changes if they consider it unsuitable or the proposed return unacceptable.
How often are IVAs rejected?
If a provider quotes an acceptance rate, ask which period and proposals it covers, how it is calculated, and whether it includes people turned down before a proposal was put to creditors. An acceptance rate does not tell you how many approved IVAs eventually complete.
Explore your debt options
Some formal debt solutions can write off eligible debts, but suitability depends on where you live, your debts, income and assets. Fees, restrictions and effects on your credit record may apply. Free, impartial debt advice is available from MoneyHelper. The enquiry form introduces you to our commercial partner; submitting it does not confirm that you qualify for any solution.
What percentage of IVAs are accepted?
No provider’s previous acceptance rate guarantees that your proposal will be accepted or that an IVA is suitable for you. Ask for advice covering the available alternatives, costs and risks before proceeding.
Explore your debt options
Some formal debt solutions can write off eligible debts, but suitability depends on where you live, your debts, income and assets. Fees, restrictions and effects on your credit record may apply. Free, impartial debt advice is available from MoneyHelper. The enquiry form introduces you to our commercial partner; submitting it does not confirm that you qualify for any solution.
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How does an IVA get accepted?
Under rule 15.34 of the Insolvency Rules, the 75% threshold is based on the value of the claims of creditors who respond. There is also a safeguard: the proposal cannot pass if creditors holding more than half of the total admitted voting value of non-associate creditors vote against it. Once validly approved, an IVA can bind relevant creditors who voted against it or did not vote.
For example, if £20,000 of debt is represented in the votes, at least £15,000 must vote in favour, subject to the non-associate safeguard. Three creditors voting yes and one voting no is not enough information: what matters is the value of their claims.
