Yes, IVAs get rejected. Rejection can happen before a proposal is sent to creditors, at the creditor vote, or after approval if the IVA later fails.
Why creditors reject IVAs#
Creditors may reject or modify an IVA where:
- The monthly payment looks too low for the household budget
- Income evidence does not support the proposal
- Assets or home equity have not been dealt with properly
- Recent borrowing needs explanation
- The return is worse than an alternative route
- The proposal does not include all relevant debts or information
Why an adviser should reject an IVA before voting#
Some cases should not reach creditor vote at all. Under the 2025 IVA Protocol, an IVA may be unsuitable where debts are very low, disposable income is very low, the person qualifies for a DRO, or a DMP would repay the debt in a similar period.
Rejecting an unsuitable IVA is better than approving one that fails later.
What happens after rejection#
If creditors reject the IVA, the agreement does not start. You still owe the debts and need another plan. The right next step may be a revised proposal, DMP, DRO, bankruptcy, settlement or direct repayment plan.
Do not assume rejection means bankruptcy is the only option. It means the proposal on the table was not accepted.
Related questions#
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