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How Often are IVAs rejected? 2022 Guide

How Often IVA Rejected

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

How often are IVAs rejected and accepted? Below you will uncover how an IVA gets accepted and how often they are accepted. We’ll also take a look at published data regarding how often they fail and other interesting IVA trends. 

A quick explanation of IVAs 

An IVA stands for Individual Voluntary Arrangement and is a legally binding debt solution. It is an agreement for you to make a monthly debt repayment, which is divided between creditors and overseen by an insolvency practitioner. 

A typical IVA lasts for five years but may be extended by one year or even more. After the initial five years, any unsecured debt that has not been fully repaid can be written off. There is a lot more to know about IVAs, which can be found here

Don’t worry, here’s what to do!

There are several debt solutions in the UK that can be used to improve your finances. Choosing the right way to tackle your debt could save you time and money, but the wrong one could cause even more harm

It’s always best to find out about all your options from a professional before you take action.

Fill out the 5 step form to get started. 

Are IVAs usually accepted?

IVAs have an increased chance of being accepted when you are paying as much as you can without causing financial hardship, which is proven to the creditors using your personal finances. An IVA is also more likely to be accepted when all your creditors are included in the IVA, which shows you are not giving one creditor preferential treatment. 

How does an IVA get accepted?

An IVA is accepted when at least 75% of your creditors agree to the proposal made by your insolvency practitioner. All creditors vote on whether to approve or reject the IVA. Even those that reject the IVA will be included in it if at least 75% of all creditors vote in favour. 

For example, if three out of your four creditors vote to approve the IVA, it will be approved and all four creditors will be included. However, if only two of your four creditors vote in favour of the IVA it will be rejected. 

What percentage of IVAs are accepted?

The percentage of IVAs that get accepted will vary between different debt charities and financial companies. The percentage of IVAs that get accepted is usually high because insolvency professionals have already assessed your suitability for an IVA before making the IVA proposal. For example, StepChange claims that 98% of their IVA proposal get accepted

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Do many IVAs get rejected?

An IVA proposal will be rejected when less than 75% of your creditors vote to approve it. The most common reason that this happens is that creditors do not believe the monthly payment is high enough. Having an IVA rejected is a real possibility even if your insolvency practitioner is confident that the IVA will be approved. 

How often are IVAs rejected?

There is no data to state how often IVAs get approved across the board. Each individual debt management company or debt charity will have its own rejection rates. You may want to consider these individual rejection rates before choosing a debt charity or debt management company for your IVA proposal. 

What percentage of IVAs fail?

It is difficult to find accurate data regarding how many IVAs fail. However, a report released by The Insolvency Service covering outcomes of IVAs between 1990 and 2018 suggests that the percentage of IVAs failing in the first year has increased to levels not seen since 2002. The same report also found an upward trend in the number of IVAs exceeding the typical repayment term. 

If an IVA fails, it could lead to forced bankruptcy. 

More guides about IVA applications – free!

The IVA application can be a tricky and mysterious process. Our IVA guides are made to make that process clearer for everyone. Learn more about IVAs and the stages of applying for them on our MoneyNerd IVA section. All our content is 100% free to read! 

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Are you struggling with debt?
Are you struggling with debt?
  • Affordable repayments
  • Reduce pressure from people you owe money to
  • Stop interest and charges from soaring