Can I Apply for An IVA if I’m Unemployed?

Are you struggling with debt and unemployed? If so, you may be wondering if you’re eligible to apply for IVA. Whilst an IVA can provide an affordable way to pay back the money you owe to your creditors, it may not be suitable for you if you don’t have a spare or regular income. You may find that you can’t really afford an IVA.

Do I need to have spare income?

Whilst there’s nothing to stop you applying for an IVA when you’re out of work, this debt solution may not be suitable if you don’t have spare income every month to pay your creditors. Normally, this should be at least £100. If your payments are less than that amount, your creditors may not accept the IVA. If you do decide to apply for IVA, your insolvency practitioner can advise you on what payments to make. They can also suggest ways that you may be able to increase your spare income.

I don’t have a regular income – does it matter?

An IVA will normally only be suitable for you if you have a regular income. The reason for this is that an IVA relies on you making payments to your creditors each month for a set period of time. If your income changes from month to month, an IVA may not be right for you.

In Short

An IVA may not be right for you if you’re unemployed. If you rely solely on benefits income, its unlikely that you’ll have enough spare money to pay your creditors enough each month. However, there are some circumstances in which you can still apply for IVA if you’re out of work. For example, if you have another income or you have financial support from a friend or family member. Contact Debt Assist UK now for further information.

Benefit-based incomes

If your income is based only on benefits, it’s unlikely that you’ll be able to get an IVA. Since benefits are provided to fund only essentials like rent, utilities, and food, it’s usually considered unacceptable to use this money for repaying debt. So, if you’re claiming benefits like Jobseekers Allowance (JSA) or Employment and Support Allowance (ESA) and you don’t have any other income, you should think very carefully before you apply for IVA. Generally, an IVA won’t be deemed a suitable debt solution for you. However, if you receive other income on top of your benefits, getting an IVA may be possible.

I have a job offer – can I apply for IVA?

You may be able to apply for IVA if you have been offered a job. However, this job offer must be in writing for it to be taken into account. Any verbal offer of employment won’t be sufficient. You will need to know the details of the role, including the start date and your expected earnings. If you have a job offer, you can usually get started with your IVA application right away.

Can I apply if I have financial support from a third party?

Some people who are unemployed may still be accepted for an IVA if they have a friend or family member who is willing to offer them financial support throughout the duration of the agreement. This money is referred to as thirdparty funds and is required to be guaranteed as an extra income for the applicant. Whilst this isn’t ideal, it can be withdrawn once you have a stable income.

An IVA may not be right for you if you’re unemployed. If you rely solely on benefits income, its unlikely that you’ll have enough spare money to pay your creditors enough each month. However, there are some circumstances in which you can still apply for IVA if you’re out of work. For example, if you have another income or you have financial support from a friend or family member. Contact Debt Assist UK now for further information.