The offer is unrealistic or unreasonable and they suspect you’re being dishonest
When proposing an IVA, you should be doing your absolute best at addressing your unsecured debts and the repayments should be realistic and reasonable. Your creditors expect you to be open and honest about your current financial circumstances and how they arose as well as ensuring all information about your income, expenses, assets and liabilities are accurate and up to date. You need to make sure that your income and expenditure statement accurately reflects the reality of your financial situation instead of lying or exaggerating in an attempt to repay as little as possible.
You must not understate or omit any sources of income such as regular overtime. It’s also important that you don’t overstate your reasonable family living expenses in order to maximise income as if your creditors become suspicious of any information, they may become suspicious about the IVA proposal as a whole and therefore reject it. They may decide to give you a chance to clarify what may have been an innocent mistake by calling a meeting with you and your insolvency practitioner but they are not required to do so and may just reject your IVA proposal without providing a reason.
If you are cohabiting, any household expenses should be divided in a reasonable way between yourself and your partner, normally calculated pro-rata to your partner’s respective income. Your creditors will expect you to disclose your joint incomes, even if your partner has no financial troubles themselves.
The offer isn’t worth their while
If the estimated amount that you have arranged to pay back via the IVA is rather low, it may not be financially viable for the creditor to accept the agreement. For example, if the example, if the debt is £600 and the projected dividend in a five year IVA is 20p in the pound, the creditor can only expect £120 of the debt to be repaid over five years. With all the administrative costs on top of that, providing proof of debt as well as keeping the account open, it might not work out to be financially viable and therefore a creditor may reject the IVA.