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What if my IVA is rejected?

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An Individual Voluntary Arrangement (IVA) is a legally binding agreement between an individual and their creditors. However, if the proposal for an IVA doesn’t receive approving votes from 75% of creditors by value, then the IVA is rejected, and you’ll have to explore other insolvency or debt relief options.

What are the next steps if my IVA is rejected?

Our licensed insolvency practitioners (IP) are highly experienced in putting together arrangements that are likely to be accepted by most unsecured creditors. However, if it isn’t deemed adequate by at least 75% of creditors by value, there are other options for you.

Alternative arrangements

These options could include a Debt Management Plan (DMP), or a Debt Relief Order (DRO). DMPs allow you to repay in monthly instalments, but can only be used for unsecured debts, can negatively impact your credit file and are not suitable for large amounts of debt.
DROs last for twelve months and can be a useful way to halt creditor pressure, write off your debts and avoid bankruptcy. However, there is a very strict set of requirements to qualify for a DRO, and you can’t own a home or substantial assets.

Wilson Field does not offer either DMPs or DROs.


IVA rejected


If you’re struggling to pay back your debts, you can apply for bankruptcy. If you owe more than £5,000, your creditor can also apply to make you bankrupt. Going bankrupt will relieve creditor pressure and the process is relatively swift, generally only lasting one year, and allows you to make a fresh start.

In the UK, bankruptcy is only applicable to individuals. Creditors Voluntary Liquidation is the equivalent of company bankruptcy.

There are repercussions though; if you own any assets which creditors consider ‘high-value’ they could be sold off to repay the debt. Your credit rating will suffer, and you won’t be able to get credit for more than £500 without informing the lender of your bankruptcy.

Some professions won’t allow you to continue working or practising, and you can’t act as the director of a limited company for the duration of your bankruptcy.

More advice on dealing with debts as a sole-trader

In summary

If your creditors reject your IVA proposal, there are other options available to repay your debts. A Debt Management Plan could help if you have unsecured debts and can afford to pay them back in manageable, monthly payments. Debt Relief Orders are also available, but the criteria in which you can apply for one is extremely limited. Bankruptcy is also a viable option if you owe at least £5,000 and want the process completed in a shorter timeframe. All these debt relief options have set criteria and implications that you should be aware of and consider before applying.

How we can help

If you’re concerned about personal debt, you should act as soon as possible. If you feel an IVA could be the solution to your problems, speak to our advisors. We can assess your circumstances and provide free, impartial advice on what would be in your best interest, with no obligation.

Authored by Ruth Jacks

Ruth Jacks

Associate & Compliance Manager

Beverley Horton Christopher Callaghan Stephen Hall

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