Problems with IVAs

Problems with IVAs can take many forms but, in our experience, they revolve mainly around payment issues. When you're trying to live within a tight budget it doesn't take much of a change to your circumstances for problems to develop.

So, what happens if you are in an IVA and you suffer a problem, will the IVA fail?

Help With IVA Problems

Well, you'll be pleased to know that there are several different option available, designed to provide relief when your IVA budget cannot cope.

The most important thing is to discuss your budget problems with your Insolvency Practitioner (IP), for without their help, your problems won't be addressed in the correct manner.

Your Insolvency Practitioner will establish the most appropriate action to take by ensuring a proper assessment is undertaken, with particular attention being given to the problems you are facing.

Remember, your Insolvency Practitioner will be keen to assist you as it's in their interests to keep you IVA on track.

Payment breaks

They have the discretion to implement a payment break of up to 6 months if circumstances require it.

This could be the perfect assistance for someone suffering a short term drop in income, such as sick leave or maternity leave.

Under the terms and conditions of protocol compliant IVAs, the Insolvency Practitioner can suspend payments into the IVA for 6 months, then extend the term of the IVA to compensate for the missed payments.

Payment reductions

If a payment break isn't the answer, it's possible to seek a reduction in the size of the monthly payments.

Again, your Insolvency Practitioner has the authority to make a 15% reduction to the payment without the need advise the creditors.

If this isn't a sufficient enough reduction, your Insolvency Practitioner can call a Variation Meeting.

This is similar to the original Creditors' Meeting, but this time each creditors is invited to vote on letting you reduce your IVA payments to a more affordable level.

If 75% or more (in debt value terms) of your creditors vote in favour of the variation, it becomes legally binding on all creditors, even if they voted against it.

IVA Help

If you're experiencing problems with your IVA you should first approach your IP, but if you'd like to have a chat with an independent IVA adviser simply complete this form and one of the team will call you at your preferred time.

Ask for Help

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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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