An Individual Voluntary Arrangement (IVA) offers a lifeline to UK citizens struggling with debt, but not every IVA proposal gets approved. If your IVA proposal has been rejected, don’t panic—there are still steps you can take to regain control of your finances. This guide will walk you through the next steps, ensuring you can maintain financial stability and work toward resolving financial stress.
Why IVA Proposals Get Rejected
Creditors may reject IVA proposals for various reasons, such as:
- Unrealistic Repayment Offers: Creditors might feel your repayment offer is too low.
- Insufficient Creditor Agreement: For an IVA to be approved, creditors holding at least 75% of the debt value must agree.
- Poor Financial Presentation: Incomplete or unclear financial details in the proposal can lead to rejection.
Next Steps After an IVA Rejection
1. Understand the Rejection Reasons
Your insolvency practitioner (IP) will provide feedback on why your IVA proposal was declined. Carefully review their explanation to identify areas for improvement.
2. Revise and Resubmit the Proposal
You may have the option to revise your IVA proposal based on creditor feedback. This might involve:
- Offering a slightly higher repayment amount.
- Including additional financial details to demonstrate your commitment.
- Adjusting the repayment period.
A revised proposal often stands a better chance of approval, especially if it addresses creditors’ concerns.
3. Explore Alternative Debt Solutions
If resubmitting an IVA isn’t viable, consider these alternatives:
- Debt Management Plan (DMP): An informal agreement to pay back creditors at a manageable rate.
- Debt Relief Order (DRO): Suitable for those with low income and minimal assets.
- Bankruptcy: While it’s a more drastic option, bankruptcy can offer a fresh financial start for some.
Each solution comes with its own implications, so consult with your IP to decide which path best suits your needs.
Maintaining Financial Stability After Rejection
Stay Committed to Budgeting
Rejected IVA proposals can feel like a setback, but maintaining financial discipline is crucial. Create a strict budget to manage your expenses and avoid falling further into debt.
Seek Professional Guidance
Working with an experienced insolvency practitioner can significantly improve your chances of resolving financial stress. They can guide you through other options and ensure your financial strategy aligns with your goals.
Protect Essential Assets
If creditors resume collection efforts, focus on safeguarding critical assets, such as your home and car. Communicate openly with creditors about your situation and intentions.
How We Can Help
At Apply for IVA, we specialise in helping UK citizens navigate debt solutions. Whether your IVA proposal has been rejected or you’re exploring alternative options, our team provides tailored advice to help you maintain financial stability and resolve financial stress.
Take Control of Your Financial Future
A rejected IVA isn’t the end of the road. By staying proactive, exploring alternatives, and seeking professional guidance, you can turn the situation around. Contact Apply for IVA today for expert advice on debt management and start building a brighter financial future.
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