If you’re struggling with mounting debts, you’ll know all too well that it’s impossible to predict what state your finances are going to be in from one year to the next. If you are in an Individual Voluntary Arrangement (IVA) this normally involves a payment plan that lasts a few years. However, it goes without saying that many people will have changes in their finances during this time.
There is a level of flexibility built into IVAs, and the person responsible for handling these will be your Insolvency Practitioner. Your IP will administer the IVA while it is elapsing. They will keep a continual eye on your finances throughout the term, and will be on hand to advise you at any point.
Normally an IVA proposal will include monthly payments set out at the beginning, and will sometimes involve releasing equity from your home if you own one. The payments are not set in stone however, and will be subject to some amount of change over time. Your IP will be best placed to explain to you the extent to which this will be possible in your own particular case.
It is always the case that an IVA should only involve payments that you can reasonably manage while still being able to afford to live well.
Better financial circumstances
If your circumstances change for the better, your IP may suggest increasing your IVA payments, but they will never suggest a change that will not leave you enough funds to live on.
Worse financial circumstances
If your circumstances change for the worse, there are a number of things that your IP may do. They may be able to negotiate with your creditors on your behalf in an attempt to keep the IVA going. They may also be able to arrange a payment holiday if your circumstances are likely to be difficult only in the short term. These measures will often involve an increase in the term of the IVA, but your IP will make sure that this is made clear to you if it is in fact the case.
No one knows what’s going to happen in the future, but the purpose of an IVA is to help you get your finances under control while avoiding bankruptcy. The reason that an IVA is administered by a professional practitioner is that they will ensure you are given what protection the law is able to afford you.
Failing to keep to the agreed payments will not necessarily mean that the IVA has failed and will end, and your IP will work to keep it going whatever happens. With any luck your IVA will be a success and you will be able to look forward to being free of your debts at the end of it.