Support for when your circumstances change
Life changes during an IVA. Jobs end, families grow and bills rise. IndividualVoluntaryArrangements.net helps people understand what an IVA can cope with before they start, and what their options are if things become difficult. If you're thinking about an IVA, we'll make sure the budget is realistic so the arrangement has the best chance of lasting the full term.
If you're already in an IVA and struggling, your first call should be to your supervisor. We can explain the options that usually exist, such as payment breaks and variations, so you know what to ask for.
How we can help
- Setting a payment you can sustain, not just one you can manage this month
- Explaining payment breaks, reductions and variations
- Outlining the alternatives if an IVA can't continue
An IVA can fail if you stop making payments or don't keep to its terms. But IVAs are designed to cope with some changes in circumstances, and there's usually help available before it gets to that point.
Why IVAs fail
- A drop in income, such as losing your job, reduced hours or illness.
- An increase in essential costs, such as a new baby or rising rent.
- Missed payments without telling your supervisor.
- Not providing information for annual reviews.
- Not disclosing a windfall, or taking on new credit without permission.
What can be done before an IVA fails
Contact your supervisor straight away
The earlier you get in touch, the more options there are. Don't wait until you've missed several payments.
A payment break
If your problem is temporary, you may be able to take a short payment break. This usually extends the end date of your IVA.
A reduced payment
If your income has fallen, your supervisor can review your budget. A small reduction may be agreed without needing a creditor vote.
A variation
For bigger changes, your supervisor can ask creditors to vote on a variation to the IVA, such as a lower payment or shorter term.
What happens if an IVA fails?
If missed payments or a breach can't be resolved, your supervisor may issue a certificate of termination (sometimes called a failure certificate). When this happens:
- The legal protection from creditors ends.
- Interest and charges can be added again by creditors.
- You still owe the original debts, minus anything creditors received through the IVA.
- Fees already paid aren't usually refunded.
- In some cases, the supervisor or a creditor may petition for your bankruptcy, although this is not common in consumer IVAs.
Your options after a failed IVA
A failed IVA isn't the end of the road. Depending on your situation, you might consider:
- A new IVA, if your circumstances have stabilised.
- A Debt Management Plan, if you can afford reduced payments.
- A Debt Relief Order, if you have low income and few assets.
- Bankruptcy, if you can't afford to repay your debts.
Struggling right now? If you're worried about keeping up with your IVA, speak to your supervisor first. You can also get free, confidential advice from MoneyHelper.
How we help you set up an IVA that lasts
The best way to avoid a failed IVA is to start with a budget that reflects real life. When you get in touch, we look closely at your income and spending, using your actual costs rather than averages wherever we can. We're cautious about counting overtime or bonuses you can't rely on, and we make sure essentials such as travel, childcare and home repairs aren't underestimated.
A payment that leaves you with nothing for emergencies may look good on paper, but it's far more likely to fail. We'd rather see a realistic payment that lasts the full term.
Warning signs that an IVA budget is too tight
- You're using your overdraft or borrowing from family to reach payday.
- You're falling behind on essential bills such as council tax or energy.
- There's no room at all for a broken appliance or a car repair.
- The budget relies on overtime or hours you aren't guaranteed.
If any of these apply, speak to your supervisor straight away. A small adjustment early on is far easier than rescuing an IVA after several missed payments.
Can you start a new IVA after one fails?
It's possible, although creditors will look closely at why the first one failed and what has changed. If your circumstances have settled down, a new proposal may be accepted. If not, another solution may be more realistic, such as a Debt Relief Order or bankruptcy.
What a payment break looks like in practice
A payment break is usually agreed for a short period, often a few months, when your income drops temporarily, for example during sick leave, between jobs or during maternity leave. Your supervisor agrees the break, and the missed months are normally added to the end of the IVA, so the arrangement finishes a little later than planned. A break isn't automatic, so contact your supervisor as soon as you know there's a problem.
How a variation works
If your circumstances change permanently, your supervisor can propose a variation to your IVA, such as a lower payment or a different term. Creditors vote on the variation in a similar way to the original proposal. You'll see the proposed changes before they go to creditors, and you can ask questions about anything you're unsure of.
Talk to us about your options
If you're thinking about an IVA and want it to last, or you're worried about an arrangement that's struggling, we can explain the options available. Use the form at the top of the page, and we'll contact you at a time that suits you.
If you're not yet in an IVA, read how an IVA works and the pros and cons before you decide, so you know what you'd be committing to. Our IVA calculator can also give you a rough idea of what an affordable monthly payment might look like based on your own income and outgoings.