Paying off an IVA early

The opportunity to pay off an IVA early would normally arise after a change in personal circumstances.

This could be as a result of a large increase in household income but, more often than not, the change in circumstances needed to settle your IVA early would be the result of receiving a financial windfall.

What's A Financial Windfall?

A financial windfall is the phrase used to describe the arrival of an unexpected sum of money, typically received through an inheritance, a redundancy or a lottery win.

If you are the beneficiary of a financial windfall and your intention is to use the windfall to pay off your IVA early you should notify your IVA's supervisor because it might not be as straight forward as you first think.

This is because your IVA has a 'Windfall Clause' and you may be required to pass the windfall to your IVA supervisor under the terms and conditions of your IVA, without getting the opportunity to use the funds as a settlement.

Your supervisor will be able to explain your obligation under the IVA and, therefore, explain what is expected of you under the windfall clause.

3rd party funds

If the settlement funds are not the result of a financial windfall, but instead being provided by a 3rd party such as a family member or friend, then your supervisor is best placed to advise you with regard the size of settlement figure you'll need to pay of the IVA early.

They'll be able to guide you as to how much money they believe your creditors will accept as a one off payment to settle the IVA.

In accordance with the Financial Conduct Authority's guidance, please follow this link if you would like to read a free guide about In Debt - Dealing with your creditors
To find out more about managing your money and getting free debt advice, visit Money Advice Service , an independent service set up to help people manage their money.

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