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


IVA Rejected

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

IVA Rejected – What to do now? (Actionable Steps to Take)

Being in debt can be a very stressful situation but opting for an IVA and that being rejected is even worse.

Oftentimes, rejected IVAs are due to lacklustre planning and with enough research and revision, you can definitely turn this bad situation into something beneficial.

When your IVA is rejected, the most important thing you can do is assess the situation with a calm and collected mind.

It will help you determine why exactly your IVA was rejected and in light of that, you can take steps to amend whatever you did wrong.

Why was my IVA Rejected?

Once you’ve sat down with your insolvency practitioner (IP) and drawn up an IVA proposal, this proposal will be presented to your creditors. They will then have to vote whether or not they agree to the terms of your IVA. You need a 75% majority vote in your favour for your IVA to be accepted.

As you can expect, a lot of IVAs get rejected because the creditors don’t find the IVA terms to be enough. They may not agree to certain conditions put forward by you or they might simply be dissatisfied with the amount you’ll be paying back over the course of your IVA. It’s your responsibility to discuss your situation with your IP thoroughly to make sure something like that does not happen.

Regardless, sometimes no matter how carefully you plan your IVA proposal, you can still get rejected. There’s no need to worry though. Your IVA being rejected does not necessarily mean that all is lost. Your IP will try their best to represent your interests and persuade your creditors to agree to the terms presented in your proposal.

If this does not work out, then your creditors might propose some changes to your proposal. If you’re willing to accept all the changes your creditors might suggest to you, your IVA will end up being accepted. If you’re not willing to accept the changes put forward, then an IVA won’t work for you and you’ll have to look at other options to take care of your debt.

iva rejected what now

My IVA was Rejected, What are My Options Now?

If your IVA is rejected and you’re starting to realise that maybe an IVA just isn’t right for you, it’s a good idea to start looking at alternatives as soon as possible. The fact that you’re not in an IVA means that you’re vulnerable to legal action by your creditors. Hence, time is definitely of the essence.

Dealing with your creditors after a failed IVA can definitely be difficult. Depending on your creditor, you may just be threatened with legal action or you may even get a notice that your creditor is indeed pursuing legal action against you.

This is why communication with your creditor is extremely important. It’s important for you to assure them that you have a plan moving forward.

We’ve listed some of the options that you can explore below:

Debt Management Plan

You can enter into an informal agreement with your creditors in order to pay back your debt to them. This would involve you personally talking to each of your creditors and ensuring them that you intend to pay back your debts to them in full.

This approach is fast and simple since there’s no paperwork involved and there are no other parties involved either. However, since it’s not a legally binding agreement, there’s a high chance that one of your creditors might grow restless and might not be accommodating of your financial situation. This means you’d still be vulnerable to legal action by your creditors.

For example, suppose you have a bad month and you’re unable to pay your monthly agreed-upon payment to your creditor. If you were in an IVA, your IP would negotiate with your creditors and some sort of compromise would definitely be reached. In the case of a debt management plan, you’re on your own. If your creditors are particularly impatient, you might find yourself in a worse situation than from where you started.

Debt Consolidation

Debt consolidation refers to the act of combining several loans you have into one loan. You do this by taking out a loan to pay off all of your initial loans and then you pay off your debt consolidation loan through monthly payments.

This may seem impractical but it can actually be a very effective way to get rid of creditors that may be trying to strong-arm you or threatening you with legal action. If you’re in such danger then a debt consolidation loan is definitely an option worth exploring.

Debt consolidation can have an overall lowering effect of the amount you pay back each month. However, it can definitely hurt your credit score initially.

That being said, if you leave the bad financial habits that landed you in debt in the first place and pay your dues on time each month, your credit score will slowly start to improve. In the end, the net effect on your credit score will be positive.


Bankruptcy is a type of legal status which states that you are unable to pay your loans when they are due. A state of bankruptcy allows you to obtain a clean slate and start fresh. In return for this, all of your assets are seized from you and divided equally amongst your creditors.

Bankruptcy can be voluntary or involuntary. For voluntary bankruptcy, you would petition for your own bankruptcy. The cost for bankruptcy is £500. For involuntary bankruptcy, one (or more) of your creditors can petition for your bankruptcy. For the petition of such creditors to be valid, you must owe a minimum of £750 to them.

Your bankruptcy goes public when it happens. It is published in the London Gazette as well as in local or national newspapers (or both).

Debt Relief Order (DRO)

A Debt Relief Order or DRO is a formal solution that is designed for people who are unable to pay off their debts given their financial situation. It is sometimes known as a mini form of bankruptcy. It was mainly conceived to give room to people that truly have no way of paying back their debts.

To be eligible for a DRO, you must owe no more than £30,000 to your creditors, you must have very little or no assets and your monthly income should be no more than £75 per month.

If you feel you’re eligible for a DRO, you will be referred to an intermediary who will discuss your financial situation with you. If they agree that you are deserving of a DRO, they will help you complete the online form which will then be submitted to a government official known as the official receiver. The official receiver will then judge your situation and pass the Debt Relief Order if they think it’s appropriate.

A Debt Relief Order is definitely a straight-forward way of removing your debts but very few people who are truly in need qualify for it. Not to mention, there are certain loans that a DRO does not cover, e.g., student loans.

Note: It’s a good idea to seek advice from an independent debt charity if your IVA gets rejected. They can help you choose another option which would have more chances of success considering your situation. An example of a debt charity currently operating in the UK is StepChange.

Consequences of Breaching an IVA

As I mentioned briefly above, if your IVA fails, then your creditors will definitely start taking action to recover the money them you owe to them.

You will also have to pay the fees of your Insolvency Practitioner (IP) regardless of the fact that your IVA failed.

The important thing is to keep in touch with your creditors and assure them that you have a plan. Try to provide as much proof as possible in order to buy time for whatever debt solution you’re setting up in place of your failed IVA.

For more information on what happens when your IVA fails, click here.


Having your IVA rejected is definitely a very scary situation to be in. However, it’s important to keep in mind that you definitely have a lot of options moving forward from here.

As long as you keep a level head and assess your options thoroughly, you’ll definitely be able to find a way out of your current situation.

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