IVA and Disability
One major concern for anyone considering entering an IVA will relate to the affordability of their IVA payments. Will they be able to live comfortably within a controlled budget, when access to credit has been withdrawn?
Well, it's a difficult question to answer with any certainty as the answer will only reveal itself once the budget has been implemented which means only time will tell.
Establishing an affordable IVA budget is really important to the success of the IVA and it's for this reason that all Insolvency Practitioners pay so much attention to an applicant's budget. Experience tells them that most IVA failures stem from a lack of affordability.
Which obviously means their concerns are further raised when an applicant isn't in full time employment, or when a large proportion of their income is received through state benefits such as Personal Independence Payment or Disability Living Allowance.
What's The Best Advice?
Their concerns relate to what is known as 'best advice'.
'Best advice' is the term used to describe impartial advice of the highest level. Where every aspect of the advice given represents the best interests of the recipient.
As you'd expect, the Insolvency Practitioner has to be seen to be giving the very highest levels of financial advice.
And this is the point. If an income is benefit based, it cannot be considered as part of an Income Payment Order (IPO) in a bankruptcy. Therefore, if a sizeable element of an IVA applicant's income is benefit based, the Insolvency Practitioner is duty bound to point out that bankruptcy would provide a faster and cheaper way of becoming debt free, when compared to entering an IVA.
Similarly if the applicant's income is low, the same argument applies and bankruptcy is, again, likely to be the fastest and cheapest option.
IVAs with PIP or DLA
When an IVA applicant is receiving Personal Independence Payment or Disability Living Allowance, the Insolvency Practitioner will be keen to point out the bankruptcy option because, as explained earlier, experience tells them that these incomes streams will not be included in calculations of an IPO the bankruptcy process.
However, it's worth emphasising that the choice as to whether to enter an IVA rather than petition for bankruptcy still rests with the applicant.
As long as the Insolvency Practitioner has explained the available options and discharged their duty to provide the best advice, they'll be happy to provide the IVA solution if that's the preferred option.
Setting an IVA budget
The criteria to qualify for an IVA are no different for someone who's receiving PIP or DLA but in all likelihood there's going to be differences in the expenditure requirements and the IVA budget as a whole.
So it's absolutely crucial to ensure the proposed IVA budget represents a realistic and accurate breakdown of the monthly needs of the applicant before a commitment is made.
Professional IVA Help
The team behind IVA.info are IVA specialists and have many years of experience in helping people enter IVAs.
Over the years we've been able to provide help and support to thousands of clients in receipt of DLA, ensuring their IVA budgets were realistic and yet still robust enough to survive the term of their IVAs.
We offer a No IVA = No Fee policy to protect our clients from exposure to unnecessary IVA fees.
If you'd like to have a chat with one of the team about entering into an IVA then please call 0800 088 7502 or, alternatively, complete this form and someone will contact you at your preferred time.
