Why is my IVA not working?
Unfortunately, life doesn't come with any guarantees, in fact, quite the opposite.
It'll come as no surprise to learn that some people who enter into an IVA with the best of intentions will encounter trouble along the way.
Trouble can strike at anytime during an IVA and sometimes it can be managed without too much effort but, occasionally, there's just no way of avoiding it.
Seek Help From Your IP
So what do you do if your in an IVA and you realise it's not working properly?
Well, the most important thing is to seek help from your Insolvency Practitioner because they have a number of different tools they can use to assist you.
The help they'll provide will be determined by the nature of the trouble you face. For instance, if you have been injured and you are unable to work, your IP has the discretion to suspend your IVA payments for up to 6 months without having to ask your creditors permission.
If the problem is less severe, they have the discretion to reduce your IVA payments by as much as 15% without having to consult your creditors.
Either of these options could be all that's required to get you back in control of the situation so, yet again, keeping your lines of communication open is crucial.
Re-assess your budget
Irrespective of the change to your circumstances, you should reassess your IVA budget before you approach your IP. They'll be keen to explore the situation with you, so you should try to prepare yourself as well as possible.
Make notes of your household income and expenditure and see if you can demonstrate the severity of the problem you're experiencing.
This will save you time and stress when discussing your situation with your IP.
If your circumstances have deteriorated to the point where your IVA is no longer viable, even with some intervention, your IP will be forced to fail your IVA.
If your IP fails your IVA, you'll need to consider your options as how best to move forward.
Occasionally the IP will determine what happens next because, sometimes, an IVA proposal will contain a clause that obliges the IP to petition for the applicant's Bankruptcy in the event of an IVA termination.
When this clause is triggered by the failure or a breach of the IVA, there's nothing that can be done to stop the bankruptcy papers being served.