Late IVA Payments

An IVA is a legal and binding document between you and your creditors.  Your Insolvency Practitioner (IP) will draw up and agreement whereby you will make fixed monthly payments for a typical period of up to 60 months, or five years.  At the end of this period, any unpaid debts will be cleared.

When drawing up this document, your Insolvency Practitioner will consider your monthly income and expenditure in order to calculate an affordable repayment plan. 

Throughout the duration of your IVA your IP will conduct regular checks to ensure your financial circumstances have not changed and that you are still managing to maintain your repayments. These reviews are usually done every six months. Should your IP find that your financial situation has changed for the better; your IP may request that you increase your monthly IVA payments.

However, if your financial situation has changed for the worse and you find yourself in a situation where you are struggling to make your monthly IVA payments, your IP may be able to help you. Your IP can contact your creditors asking to agree to new terms of the proposal, i.e., reduce your monthly payments. If you have maintained your monthly payments up to this point and honoured the terms of your proposal, your creditors may agree to this.

Generally, your IVA proposal will state that your IVA will become invalid should you miss 2 or more payments during the term. This clause is directed more at individuals who simply neglect to make payments without a valid reason, and not people who are genuinely suffering from financial problems. 

If, at any time, you feel that feel that you may be unable to make a repayment, contact your IP immediately.  You should also keep your IP updated re your financial situation and inform them regarding any changes as soon as they occur.

If your situation has become a lot worse, your IP can call a meeting with your creditors asking for approval for a 'payment holiday'. This will allow you sufficient time to work out your financial problems before resuming the regular monthly payments. However, in these circumstances, it is likely that the amount of time missed on your IVA during this 'holiday' will simply be added on at the end of your IVA, meaning a longer IVA term.

If you have no valid reason for defaulting on your IVA agreement, your IVA will become invalid and as a consequence you will be declared bankrupt. Also, if you are unable to restart your regular payments, your IVA will also fail. In this case your creditors will have every right to take further action against you.

If you find yourself struggling with your IVA payments at any point, contact your IP immediately, who will do everything they can to help you.