What happens if you stop paying your IVA

If you’re struggling to make your IVA payments, talk to your provider. If possible, you should do this before you miss a payment. 

Your IVA payments should be set at a level that allows you to cover your essential living costs. 

If this isn’t the case, your IVA provider may be able to help.

Payment breaks

If your financial difficulties are temporary - e.g. you’ve been signed off sick from work for a time or had to pay for expensive car repairs – your insolvency practitioner (IP) might be able to offer you a payment break. 

You’ll have a better case for a payment break if you can provide evidence of your financial difficulties. This might be a bank statement, a receipt, a letter etc.

If you’re given a payment break, your IVA will be extended by the same amount of time.

Reduced payments

If your income has gone down or your essential costs have increased so you can no longer afford your IVA payments, you may be able to get them reduced.

To reduce your payments by more than 15%, your IP will usually need permission from your creditors. This is called a variation. For smaller reductions, this may not be necessary.

Other debt solutions

If your situation has changed, it may be that an IVA is no longer the best solution for you. If your IP thinks you’d benefit from speaking to a debt adviser about alternative options, they’ll let you know.

If you don’t keep up with your IVA payments, you’ll be breaching the terms and conditions. This can cause it to fail. 

If you miss a payment, your IVA provider will be in touch to find out why.

You’ll usually be given a month to respond.

If you ignore your IP, they could end your IVA.  

You would then need to contact your creditors immediately to discuss how you plan to repay your debts or you could be made bankrupt. 

This is why it’s important to get in touch with your IP as soon as possible if you’re struggling to pay. As we’ve seen, there are a variety of ways they may be able to help.