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Failure of an individual voluntary arrangement

This advice applies to Northern Ireland

This page tells you what to do if you have an Individual Voluntary Arrangement (IVA) and it fails. This usually happens when you can no longer make the payments.

Difficulty with payments

If you can no longer make payments you should tell your insolvency practitioner straight away. They may be able to change the arrangement so that you can make reduced payments.

You can’t make payments at all

If you can’t make payments to your IVA and your creditors won’t accept lower payments, your IVA will fail.

This means you will still have all your debts and your creditors can take action against you for those debts. 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.

You will still have to pay your insolvency practitioner their fees for the work they have done so far.

Being made bankrupt

If your IVA fails, your insolvency practitioner can ask the court to make you bankrupt. If you have a low income and don’t own a home, this may be a good solution for you. There are risks though, so find out about how bankruptcy may affect you before letting this happen.

Alternatively, your creditors may try and make you bankrupt. Normally, your creditors would have to give you a warning, called a statutory demand, but they don't need to do this if your IVA has failed. They can ask the court to make you bankrupt straight away on the grounds that you haven’t kept to your IVA.

If you want to avoid bankruptcy, you should contact your creditors straight away. You should try and come to an agreement with them each separately about how you will repay the debt.

Other options when the IVA fails

If your IVA fails there are other debt solutions available. You should find out about these options and which might be best for you.

Making a complaint

If you think you were mis-sold an IVA, or pressured into it without being told about other debt solutions available, you could complain.

Next steps

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