What if I am unable to keep up with my payments in an IVA?

An IVA will fail if you can't keep up with payments

We receive a lot of calls and emails from the public asking; "What if I am unable to keep up with my payments in an IVA?".

If you can’t keep up with the payments on an IVA then the IVA will fail. After an IVA fails there is a risk that either the Creditors or the Insolvency Practitioner will petition for your Bankruptcy. Normally sufficient funds will have been put aside by the Insolvency Practitioner to petition for Bankruptcy should the need arise.

If a bankruptcy petition is presented, then any assets you may have could be at risk, as could your job. It is essential that you seek advice should this happen.

Alternatively you may be able to consider another option to repay your debts, such as a Debt Management Plan or an Informal offer of payment which you would have to make yourself.

Refer to the IVA proposal or chairman’s report if you can’t keep up with the payments.

The majority of IVA proposals have a condition that the Supervisor retain the funds necessary to petition for bankruptcy, and that they will do so when the IVA is deemed to have failed and the court have been notified of termination of the IVA. Most IVA proposal are deemed to have failed when payments fall into arrears by 2 months. But in reality many IVA insolvency practitioners let things go on for much longer, and can’t be bothered with petitioning for bankruptcy, so try and persuade the debtor to do it. Many debtors prefer to petition themselves, as then they may be able to have a telephone interview.

If you would prefer for the supervisor to petition so you don’t have to pay the fees, check the terms of your IVA proposal, under 'default' or 'termination'. If you have no assets and the IP does petition, they will not seek to be your trustee I think because you have no assets.

In most cases an IVA is a five year plan.

You should only consider an IVA if you feel your income will be steady for the entire IVA period.

If you cannot keep up with the IVA payments you should contact the IVA Insolvency Practitioner immediately.
There are valid reasons that may affect your ability to keep up payments such as; loss of work, ill health, divorce, death in the family.
The standard terms of an IVA state that you may miss two payments if you have the IVA supervisor’s permission. If you miss more than three payments in a year then the IVA may automatically fail.

Money Advice Direct operate a strict IVA policy

Please note that the IVA unit will never recommend an IVA unless our detailed income and expenditure analysis illustrates that you can keep up with and feel comfortable with the payments.

If you can’t keep up with the IVA payments you can vary the terms of the IVA. No one can ever be certain of what will happen in the future.

When you entered into the IVA, it was on the basis of what was known at the time. Unfortunately sometimes things don’t go as planned and your circumstances can change for the worse - and sometimes for the better!

If you are made redundant for example, or change jobs and your income is lower, it will have an impact on your ability to repay your monthly IVA payments. If this happens, you should contact the IVA Supervisor to explain your change in circumstances and they will be able to advise you what will happen next.

You may also find your circumstances have improved, perhaps you have come into money, and therefore you may be in a position to discuss an early settlement of your IVA. Again you should contact the Supervisor.

If you would like to know what to do if you can't keep up with the payments in an IVA please complete the following form or telephone 0800 074 6918.

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IVA's

The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.

In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]

What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
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What if I am unable to keep up with my payments in an IVA?

An IVA will fail if you can't keep up with payments

Refer to the IVA proposal or chairman’s report if you can’t keep up with the payments.

In most cases an IVA is a five year plan.

Money Advice Direct operate a strict IVA policy

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