Why Would a Creditor Refuse an IVA? Main Reasons

by

Are you questioning why a creditor would refuse an Individual Voluntary Arrangement (IVA)? Many people ask this same question. This article will help you understand:

Sometimes, a creditor may say no to an IVA. This could be because of an unrealistic budget, incorrect information, or bad past experiences. But don’t worry; if your IVA is rejected, there are other paths you can take to manage your debt. We’re here to guide you through these options.

Our advice comes from years of experience helping people with debt issues. Each month, thousands of people visit our website for advice on IVAs. We understand the worry and stress that debt can cause, and were here to help you navigate this tricky situation.

Let’s get started.

Why was My IVA Rejected by My Creditors? 

There could be a number of different reasons, depending on your circumstances, as to why your IVA was rejected. 

Some of these are: 

You Provided Incorrect or Incomplete Information 

Remember that your creditors are people or entities that have been dealing with you for a while. Hence, they will have some semblance as to what your financial circumstances are like.

When youre coming to them with an IVA proposal, they will expect you to be thorough as well as truthful. 

Thus, if a creditor is aware that youre hiding something in your IVA proposal or are presenting it as something that its not, its highly likely that they will reject your proposal. 

Your creditors may inquire about it with your IP who will be chairing the IVA meeting of creditors but they are under no obligation to do so. 

Theres a chance that they may flat-out reject your proposal if they feel that theyre being lied to.

Thus, its important that you be extensive and honest when youre writing your initial proposal in order to get your IVA approved. 

Unrealistic Budget or Payment Plan 

When youre trying to take care of your debt through an IVA, youre going to need to be honest about what your payment plan is going to look like.

It should be your best possible attempt to address the unsecured debt you have with your creditors. 

Thus, the payment plan that you propose to take care of your debts should be consistent with the income and expenditure you provide in your proposal. 

Its important that you disclose all the debt you have as well as all the income that comes your way each month. Nothing should be omitted, understated or overstated. 

For example, if you work overtime regularly and this boosts the amount of income you get, then you should include this information within your proposal. 

Similarly, the essential living expenses which you detail in your proposal should also be reasonable. 

If you share your household with a partner, then your creditors will expect you to spilt the household costs with them in a reasonable way. 

Creditors May Have Had Bad Experiences with You in the Past

If you have acted in an irresponsible way in the past regarding your finances and your creditors are aware of this, theres a likelihood that they will reject your proposal. 

If the debt you are in now occurred due to chronic addiction or irresponsible behaviour such as reckless spending, drinking or drug abuse, then your creditors will need some sort of assertation that you have mended your ways. 

If creditors feel that youre going to continue behaving irresponsibly if your IVA is approved, then, of course, theyre going to reject it. 

Your Proposal may not be Viable for a Creditor (or Creditors)

Of course, if a creditor feels that the amount that theyll be paid back by you will be very low if they enter into an IVA with you, then theyll reject your offer. 

Its more likely that creditors will be willing to accept your proposal if they feel that theres no other way you can realistically pay back your debt to them in full. 

How does the initial IVA Proposal Work? 

When you decide to opt for an IVA, the first thing you will do is look for an insolvency practitioner (IP). If youre opting for an IVA company, be sure to go for one that is authorised and regulated by the Financial Conduct Authority (FCA). 

Once youve found one, you and your IP will sit down and draft an IVA proposal.

The IVA proposal will have detailed information about your income, expenditure, total debt and assets. It will also have a complete payment plan that would be put into place if your creditors were to accept your IVA proposal. 

Once youve drafted your IVA proposal with your insolvency practitioner, they will call a meeting with your creditors and present the proposal to them. 

Your creditors will then deliberate over the proposal and either accept or reject it.

In order for your IVA proposal to be approved and your IVA to be put into place, youre going to need the approval of at least 75% of your creditors. 

Its important to note that the vote of every creditor does not hold the same weightage; It depends on how much money you owe to them. 

For example, if you owe 80% of your total debt to creditor 1 and 20% of your debt to creditor 2. Then, creditor 1s vote will count for 80%. Thus, if creditor 1 rejects your proposal but creditor 2 accepts it, then your IVA proposal will fail. 

What Should I Do if My IVA gets Rejected? 

When creditors refuse your proposal, they may provide your IP with reasons as to why they rejected it.

They may even propose some changes to your proposal. 

You then have a choice to accept their changes or make amends to your proposal in order to make it acceptable for them. 

You can choose this path if youre willing to accept the changes they propose and in this way, your proposal may get accepted.

I highly advise that no matter what your financial circumstances, you should seek debt advice from your IP before you decide to make amends to your proposal for your creditors. 

If youre not willing to accept the changes that your creditors propose, then you can opt to go for some other debt solution to take care of your debt. Depending on your financial circumstances, one debt solution may be a lot better for you than others. 

I highly advise that when youre opting to choose between debt solutions that you seek debt advice from a professional. Its a good idea to seek debt advice from independent charities such as Stepchange or Payplan. Theyll provide you with debt advice free of charge. 

Some examples of other debt solutions are: 

Debt Management Plan (DMP) 

A debt management plan is similar to an IVA in that its an agreement between you and your creditors that you will make small payments to them monthly and pay your debt back to them over an agreed-upon period of time.

Please note that a DMP is not legally binding like an IVA is. 

You can choose to set up a DMP yourself with your creditor(s) or you could also hire a debt management company (or debt charity) to get it set up. Always opt for a company that is authorised and regulated by the Financial Conduct Authority. 

Debt Relief Order (DRO) 

You can opt for a DRO if your overall debt amounts to less than £30,000 and you have a spare monthly income of less than £75. 

A DRO is much quicker than an IVA as it ends within 12 months. However, in order to qualify for a DRO, you need to have little to no assets to your name. There are also other strict eligibility criteria which you should be aware of. 

Bankruptcy 

You could file for bankruptcy and get your debt settled in a relatively shorter amount of time.

Unlike IVAs, your assets are not protected when you declare bankruptcy. They can be seized and sold off. 

185 thoughts on “Why Would a Creditor Refuse an IVA? Main Reasons”

  1. You really make it appear so easy with your presentation but I in finding this topic to be
    really one thing which I feel I might by no means understand.

    It kind of feels too complicated and extremely large for me.

    I am having a look forward to your subsequent put up, I’ll attempt to get
    the hold of it! Lista escape roomów

  6. I have to show my appreciation to you just for rescuing me from this particular challenge. Because of browsing throughout the the net and coming across thoughts that were not beneficial, I was thinking my life was over. Existing without the strategies to the problems you’ve solved as a result of the guideline is a serious case, as well as those which may have in a negative way affected my entire career if I had not come across your website. Your own knowledge and kindness in taking care of all areas was tremendous. I’m not sure what I would’ve done if I had not discovered such a point like this. I am able to at this moment look forward to my future. Thanks a lot very much for this impressive and result oriented help. I will not hesitate to refer the blog to any individual who should get tips on this problem.

  9. Next time I read a blog, Hopefully it does not disappoint me just as much as this one. After all, Yes, it was my choice to read, but I truly believed you would have something interesting to talk about. All I hear is a bunch of moaning about something you can fix if you were not too busy searching for attention.

  11. May I just say what a comfort to discover somebody who genuinely knows what they are talking about online. You actually understand how to bring a problem to light and make it important. More people should look at this and understand this side of your story. It’s surprising you aren’t more popular because you definitely possess the gift.

  19. An interesting discussion is worth comment. I think that you should write more about this issue, it might not be a taboo matter but usually people do not speak about such issues. To the next! Best wishes!

  21. When I originally commented I seem to have clicked on the -Notify me when new comments are added- checkbox and now whenever a comment is added I get 4 emails with the exact same comment. Is there a way you are able to remove me from that service? Thanks.

  22. Nice post. I learn something new and challenging on blogs I stumbleupon on a daily basis. It’s always helpful to read through articles from other writers and use a little something from other sites.

  25. Great web site you’ve got here.. It’s hard to find high quality writing like yours nowadays. I really appreciate individuals like you! Take care!!

  29. Can I simply say what a comfort to find somebody who actually understands what they’re discussing over the internet. You actually know how to bring a problem to light and make it important. More and more people really need to read this and understand this side of the story. It’s surprising you aren’t more popular since you certainly have the gift.

  36. Hi, I do believe this is an excellent blog. I stumbledupon it 😉 I am going to come back yet again since I bookmarked it. Money and freedom is the greatest way to change, may you be rich and continue to help other people.

  46. Oh my goodness! Incredible article dude! Thank you, However I am having troubles with your RSS. I don’t understand why I cannot join it. Is there anybody having the same RSS issues? Anybody who knows the solution can you kindly respond? Thanks.

  49. Oh my goodness! Incredible article dude! Thank you, However I am experiencing issues with your RSS. I don’t know the reason why I am unable to subscribe to it. Is there anybody having identical RSS problems? Anyone who knows the solution can you kindly respond? Thanx!!

  57. I’m amazed, I have to admit. Rarely do I come across a blog that’s equally educative and engaging, and let me tell you, you have hit the nail on the head. The issue is something which too few folks are speaking intelligently about. I am very happy that I came across this during my hunt for something concerning this.

  58. Thank you a bunch for sharing this with all people you really know what you’re speaking approximately! Bookmarked. Please also discuss with my web site =). We will have a hyperlink change contract between us!

  60. Oh my goodness! Incredible article dude! Thanks, However I am having issues with your RSS. I don’t understand why I am unable to subscribe to it. Is there anybody getting similar RSS issues? Anyone that knows the solution can you kindly respond? Thanks.

  62. You’re so cool! I don’t suppose I have read through something like that before. So wonderful to find another person with some original thoughts on this topic. Really.. thanks for starting this up. This website is one thing that’s needed on the web, someone with some originality.

  66. After I initially commented I appear to have clicked the -Notify me when new comments are added- checkbox and now each time a comment is added I recieve 4 emails with the same comment. Is there a means you are able to remove me from that service? Thanks.

  83. Hi! I could have sworn I’ve visited this web site before but after going through many of the posts I realized it’s new to me. Nonetheless, I’m certainly happy I discovered it and I’ll be bookmarking it and checking back frequently.

  87. Hi there! Do you know if they make any plugins to assist with
    Search Engine Optimization? I’m trying to get my website to rank for some targeted keywords
    but I’m not seeing very good results. If you know of any please
    share. Many thanks! You can read similar article here: Wool product

  90. An outstanding share! I have just forwarded this onto a colleague who has been conducting a little research on this. And he in fact bought me lunch due to the fact that I found it for him… lol. So allow me to reword this…. Thanks for the meal!! But yeah, thanx for spending the time to talk about this topic here on your web site.

  92. You are so awesome! I don’t suppose I have read a single thing like that before. So wonderful to find somebody with original thoughts on this issue. Really.. thanks for starting this up. This site is one thing that is required on the web, someone with some originality.

  95. I know this if off topic but I’m looking into starting my own weblog and was curious what all is needed to get setup? I’m assuming having a blog like yours would cost a pretty penny? I’m not very web savvy so I’m not 100 positive. Any recommendations or advice would be greatly appreciated. Appreciate it

  101. I’m impressed, I have to admit. Seldom do I come across a blog that’s both educative and interesting, and let me tell you, you’ve hit the nail on the head. The problem is an issue that too few people are speaking intelligently about. Now i’m very happy that I came across this in my search for something concerning this.

  104. sugar defender reviews Uncovering
    Sugar Protector has actually been a game-changer for me, as I’ve constantly been vigilant about handling
    my blood glucose degrees. I currently feel equipped and
    positive in my ability to keep healthy degrees, and my most recent health checks have mirrored this progress.

    Having a reliable supplement to complement my
    a substantial resource of comfort, and I’m really thankful for
    the considerable difference Sugar Defender has actually
    made in my overall wellness.

  106. The very next time I read a blog, I hope that it won’t fail me as much as this one. I mean, Yes, it was my choice to read through, but I genuinely believed you would have something helpful to say. All I hear is a bunch of crying about something you could fix if you were not too busy searching for attention.

  109. I’m very pleased to discover this great site. I need to to thank you for your time for this particularly fantastic read!! I definitely savored every little bit of it and i also have you book-marked to see new stuff on your web site.

  110. A creditor may refuse an IVA if they believe the proposed repayment plan is insufficient to recover the debt. Common reasons include offering too little monthly repayment, unrealistic income estimates, or the debtor’s assets being undervalued. For instance, a creditor might not accept a proposal that prioritizes non-essential items like a purple suede jacket over debt repayment.

  112. Hi there! This post could not be written any better! Reading through this article reminds me of my previous roommate! He always kept talking about this. I most certainly will send this information to him. Pretty sure he’s going to have a good read. Many thanks for sharing!

  113. An outstanding share! I’ve just forwarded this onto a colleague who was conducting a little homework on this. And he in fact ordered me lunch simply because I stumbled upon it for him… lol. So let me reword this…. Thanks for the meal!! But yeah, thanx for spending the time to discuss this issue here on your website.

  115. I really love your site.. Pleasant colors & theme. Did you make this web site yourself? Please reply back as I’m hoping to create my very own blog and want to know where you got this from or just what the theme is called. Kudos.

  117. Thanks for any other informative web site. Where else may just I am getting that kind of info written in such a perfect manner? I’ve a undertaking that I’m just now working on, and I have been on the look out for such info.

  120. An interesting discussion is definitely worth comment. I do think that you should write more on this subject, it may not be a taboo matter but generally people don’t speak about such issues. To the next! Best wishes.

  126. Oh my goodness! Incredible article dude! Thank you so much, However I am having issues with your RSS. I don’t understand why I can’t subscribe to it. Is there anyone else getting the same RSS problems? Anybody who knows the answer can you kindly respond? Thanks!

  129. A powerful share, I simply given this onto a colleague who was doing just a little evaluation on this. And he in reality bought me breakfast as a result of I discovered it for him.. smile. So let me reword that: Thnx for the deal with! However yeah Thnkx for spending the time to debate this, I feel strongly about it and love studying more on this topic. If possible, as you turn out to be experience, would you thoughts updating your blog with extra details? It is extremely helpful for me. Big thumb up for this blog submit!

  132. You are so interesting! I do not think I’ve truly read something like that before. So good to find somebody with unique thoughts on this subject. Really.. many thanks for starting this up. This website is one thing that is required on the web, someone with a bit of originality.

  134. I blog quite often and I genuinely appreciate your content. The article has truly peaked my interest. I am going to bookmark your site and keep checking for new details about once per week. I subscribed to your RSS feed too.

  139. The next time I read a blog, Hopefully it doesn’t disappoint me as much as this one. After all, I know it was my choice to read, however I really believed you would probably have something helpful to talk about. All I hear is a bunch of whining about something that you could fix if you weren’t too busy seeking attention.

  143. It?¦s really a great and useful piece of info. I am glad that you just shared this helpful information with us. Please keep us informed like this. Thank you for sharing.

  144. Having read this I thought it was rather enlightening. I appreciate you finding the time and effort to put this article together. I once again find myself personally spending way too much time both reading and commenting. But so what, it was still worth it!

  147. When I originally left a comment I seem to have clicked on the -Notify me when new comments are added- checkbox and now whenever a comment is added I receive four emails with the exact same comment. There has to be an easy method you are able to remove me from that service? Kudos.

  148. Hi, Neat post. There is a problem with your site in internet explorer, would test this… IE still is the market leader and a large portion of people will miss your magnificent writing due to this problem.

  149. This is a great tip especially to those new to the blogosphere. Brief but very precise information… Thank you for sharing this one. A must read post.

  154. I’m impressed, I must say. Seldom do I come across a blog that’s both educative and engaging, and without a doubt, you’ve hit the nail on the head. The problem is something that not enough folks are speaking intelligently about. I am very happy I stumbled across this during my search for something regarding this.

  157. Simply want to say your article is as astonishing. The clearness in your post is just great and i can assume you are an expert on this subject. Fine with your permission allow me to grab your RSS feed to keep up to date with forthcoming post. Thanks a million and please carry on the enjoyable work.

  158. Aw, this was an exceptionally good post. Taking the time and actual effort to make a superb article… but what can I say… I procrastinate a lot and never seem to get nearly anything done.

  160. After looking into a few of the blog articles on your web site, I seriously appreciate your way of writing a blog. I saved as a favorite it to my bookmark website list and will be checking back in the near future. Please check out my web site too and tell me what you think.

  161. Excellent beat ! I would like to apprentice at the same time as you amend your website, how could i subscribe for a blog website? The account helped me a acceptable deal. I had been tiny bit acquainted of this your broadcast offered brilliant transparent concept

  167. I needed to thank you for this very good read!! I certainly enjoyed every little bit of it. I’ve got you book-marked to check out new things you post…

  170. Aw, this was an exceptionally nice post. Taking a few minutes and actual effort to make a really good article… but what can I say… I put things off a lot and never manage to get nearly anything done.

  172. Explore a wide range of unique cycling gear, including jerseys, bib shorts, and custom designs. Perfect for every cyclist, from casual riders to pros. High-quality materials, standout designs, and options for personalization make it easy to find the perfect fit for you or your team. Shop now and ride in style!

  173. An outstanding share! I have just forwarded this onto a coworker who has been conducting a little homework on this. And he actually bought me lunch simply because I discovered it for him… lol. So allow me to reword this…. Thank YOU for the meal!! But yeah, thanx for spending some time to discuss this subject here on your blog.

  175. You made some decent points there. I looked on the internet for more information about the issue and found most individuals will go along with your views on this site.

  177. Howdy! This article could not be written any better! Looking through this article reminds me of my previous roommate! He always kept preaching about this. I will forward this article to him. Pretty sure he’s going to have a good read. I appreciate you for sharing!

  179. Howdy! This blog post could not be written much better! Looking at this post reminds me of my previous roommate! He continually kept talking about this. I’ll forward this information to him. Pretty sure he’ll have a great read. Many thanks for sharing!

  183. An outstanding share! I’ve just forwarded this onto a colleague who was conducting a little research on this. And he actually ordered me breakfast due to the fact that I found it for him… lol. So let me reword this…. Thanks for the meal!! But yeah, thanks for spending some time to talk about this subject here on your web page.

  184. An impressive share! I’ve just forwarded this onto a co-worker who had been doing a little research on this. And he actually ordered me breakfast simply because I found it for him… lol. So let me reword this…. Thanks for the meal!! But yeah, thanx for spending some time to discuss this topic here on your blog.

Leave a Comment