If you're struggling with your IVA payments

This advice applies to England. See advice for See advice for Northern Ireland, See advice for Scotland, See advice for Wales

If you can't afford your IVA payments, you should contact your insolvency practitioner straight away.

Tell your insolvency practitioner why you’re struggling to pay. They might let you:

  • pay later than usual

  • pay less than usual for a short time or for the rest of your IVA

  • pay nothing for a short time

  • settle the IVA early

If you miss a payment, check if your insolvency practitioner has sent you a ‘notice of breach’ - this asks you to explain what went wrong and to put it right. Putting right a late payment would mean paying it as soon as possible.

Most IVAs will give you up to 1 month to respond to a notice of breach. If you respond on time and agree how you'll pay any missed payments, your insolvency practitioner won't take any more action against you.

If you don’t contact your insolvency practitioner they might end your IVA. They might also make you bankrupt.

If you just need a bit more time

Your insolvency practitioner might agree to give you a payment break if you've got a temporary emergency that means you can't make your payments. For example, you might be too sick to work or have an unexpected bill for something essential like repairs to your car.

Check your IVA paperwork - it will say if you can get a payment break and how long it can be. If you can’t find your paperwork or you don’t understand it, speak to your insolvency practitioner.

You'll have to provide evidence to your insolvency practitioner about your situation - for example, bank statements, benefits letters or a receipt for an emergency item you had to buy.

If you get a payment break the length of your IVA will be extended to cover the payments you miss.

If your situation isn’t likely to get better

If your financial situation has got worse and is unlikely to improve, talk to your insolvency practitioner. You might be able to either:

  • reduce your monthly IVA payments permanently

  • settle your IVA early

Your insolvency practitioner can reduce your payments without getting permission from your creditors if your IVA was made under the ‘IVA protocol’. The IVA protocol is a code of practice that all insolvency practitioners and most creditors have signed up to. Most IVAs are made under the protocol but if you're not sure, ask your insolvency practitioner.

If you need more support to help with the cost of living, your creditors might agree to reduce your payments by 50% or to £75 a month, whichever is higher. You can do this whether your IVA was made under the IVA protocol or not.

If your IVA was made under the IVA protocol

Your insolvency practitioner can reduce your monthly payments by up to 15% without having to ask your creditors.

If you want to reduce your payments by more than 15%, your insolvency practitioner will have to get permission from your creditors - they might charge you a fee for this. If the creditors don't agree to the change and you can't keep up your payments, your IVA will end and you'll have to find another way to pay your debts.

If your payments are reduced, your IVA will usually last longer.

If your IVA wasn’t made under the IVA protocol

Your insolvency practitioner will have to ask your creditors for permission to reduce your monthly payments. Your insolvency practitioner can charge a fee for this.

If your payments are reduced, your IVA will usually last longer.

If your creditors don’t agree to reduce your payments and you can't afford to keep paying, your IVA will fail and you'll have to find another way to pay your debts.

If you want to settle your IVA early

You’ll need to show why you can’t afford to pay it any more - for example, you can’t work because of sickness or disability or you’re struggling with the cost of living.

If your creditors agree, your remaining debt will be ‘written off’ - this means you don’t have to pay it. This is sometimes called making your IVA 'paid up' or agreeing a 'full and final settlement'.

Check what happens if your IVA fails

If you can’t make payments to your IVA and your creditors won’t accept lower payments or agree to settle your IVA early, it might fail.

Your insolvency practitioner will send you a certificate of termination which ends the IVA.

This means you'll still have all your debts and your creditors can take action against you for them. You’ll still have to pay your insolvency practitioner their fees for the work they’ve done so far.

Your insolvency practitioner could make you bankrupt if there are enough funds in the IVA, otherwise your creditors can take action individually to make you bankrupt.

Depending on your circumstances, bankruptcy might be the best option for you. Check if bankruptcy is right for you.

If you want to avoid bankruptcy, contact each of your creditors straight away and either:

  • try to agree a plan to pay the money you owe them

  • ask them to pause taking action against you while you check your other options

If your creditors still say they're going to make you bankrupt, talk to an adviser.

Check your other options

If your IVA fails there are other debt solutions available. You should check your options for getting out of debt.

If you think you shouldn’t have been given an IVA

If you think you were mis-sold an IVA, or pressured into it without being told about other debt solutions available, you could complain. You can find out how to:

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