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I know this may seem like a silly question and one thats probably been asked many times before but...

What are the usual reasons for an IVA to be refused?

Is it offering too little or maybe they believe you can contribute more than 100 pence in the pound after "their" idea of allowances have been deducted?

Hi again

There can be many reasons why an IVA can be turned down by creditors, so I thought I would give you some tips for success instead:-

1 Find an IP who is experienced in dealing with consumer debt based IVA's, has a good relationship with the creditors and a success rate at getting proposals through creditors meetings.

2 Take a second or third opinion, just to take the best of the advice available before you choose.

3 Make sure that you include all creditors within the arrangement - don't try and leave anyone outside including friends and family.

4 Make full disclosure of all of your assets to the IP.

5 Get a professional valuation of your property if you own one, or provide a copy of your rental agreement to the IP.

6 Ensure that your income is based upon a basic salary only - overtimem, commissions and bonuses should not be relied upon as part of basic income.

7 List out all of your household expediture and ensure that you provide for contingencies such as house and car maintenance, medical expenses and miscellaneous items.

8 Ensure that you feel the payments suggested by the IP (based upon your information) are affordable.

9 You will need to be offering a dividend of at least 25p in the £ to guarantee success, and potentially more if you have debts with HSBC or Northern Rock.

Hope these points help you to make the correct decision, and do make sure that you consider the other options of debt management and bankruptcy as well.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Thank you Melanie that was great, you and the other IP's who post on here are a credit to your industry


We have calculated on a 35k debt we could afford approximately £400 a month on a tight but not impossible budget. People keep mentioning 25 p in the pound etc but i wouldnt know how to calculate this? Also how do the IP's fees work in relation to all this. I have read the norm is approx 8000.

Am i right in thinking our contribution of 400 would mean a total of 24000 over 5 years then minus say 8000 IP fees leaving 16000 which would mean about 45 pence in the pound? Is that how it works out, i cant quite understand it all properly. Is 45p in the pound a good offer, i would like to offer as much as we could as i do feel responsible for my debt. 3 of my creditors are Northern Rock, HSBC and MBNA (all the bad ones it seems). I ask because a firm i approached suggested that was too much to offer and the creditors would fail the IVA to keep me on a DMP instead to maximise the return. Does this sound right? It made us even more worried when we heard this..

One last question. Our car is currently worth approx £2500 would they include this as an asset and force us to sell it?

An offer of 45p in the £ is a good return in an IVA, and I would have no hesitation in putting that forward for you. The firm who advised you that your offer was "too much" speak utter rubbish, and I have never had creditors turn down one of my IVAs on the basis that they would be better off in a DMP.

You would not be required to sell your car, as I imagine it is used for transport to and from work.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Once again thank you.

if only all IP's could be as straight talking as you are.

If we choose to speak with you regarding an IVA would you normally recommend going onto a DMP while the IVA process is going through? Would this limit the amount of phone calls we are likely to receive from creditors?

Not necessarily, as we process our IVA applications very quickly so there would be little point.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Melanie is quite right

For someone to suggest that an offer of 45p in the £ for an IVA is too much is utter rubbish. In an IVA, you are meant to offer as much as you can. If this means 75p in the pound, then you would have to offer it and the creditors would be happy to accept.

I note, you have an HSBC debt. They normally required 40p in the pound. However, if you can afford 45 this that should be no problem.

James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions for over 10 years.

For more information visit www.jamesfalla.com and visit my blog at: http://jamesfalla.blogs.iva.co.uk

IVA tips:

Do not underestimate what you need to live in it will cause you problems and will not help your casue.

Do be open and honest do not hide any debts or credit agreements

Shop around for a good I do not go for the first one you come acoss

Do not see it as painless it is not, remember this an agreement you pay what you can and not a total write off of your debts.

Open a basic bank account as soon as you can

Do not panic and remember your life is more important than pride, what the neighbours think or money, money can be replaced your life cannot.