IVAs are a legally binding contract between you and your creditors, but there is an amount of flexibility built into them. Your IVA will be administered by an Insolvency Practitioner (IP), and they will be responsible for monitoring it and you throughout the term.
Failing to make the IVA payments does not necessarily mean that the IVA will not have been a success. In many circumstances, your IP will be able to preserve the arrangement and keep it going even if you’re having difficulty keeping to it in the short term.
The right proposal
In the ideal scenario, you will have worked out a proposal that is going to be manageable for you when your IVA is first set up. However, our lives are unpredictable, and there is always a chance that your circumstances will change, leaving you unable to keep to the agreement.
Speak to your Insolvency Practitioner
If you are worried that you are not going to manage to make the IVA payments at any time, it is vital that you speak to your IP as soon as possible. This will give them the best chance possible to salvage the arrangement and keep it from failing.
Payment holidays
There are different approaches that the IP may take in order to protect your IVA from failure if you’re struggling with the payments. In some cases they can arrange a payment holiday, although this will normally only be in cases where it is clear that you are likely only to have trouble making the payments in the short term, i.e. it needs to be the case that your circumstances are going to improve soon.
Renegotiate
Sometimes an IP will attempt to renegotiate the terms of your IVA with the creditors involved in it. They can in this case try and have your payments reduced at least for the time being, sometimes with consequence that the overall term is increased. Naturally your IP should keep you informed through this process, and will only go ahead with arrangements that you agree to.
The importance of making the right IVA proposal in the first place cannot be overstated. However, even in cases where people fail to make some of the payments, it is often possible to keep the IVA going. In the worst case scenario where you simply cannot make the payments and are left exposed to legal action from your creditors, you should seek professional advice as soon as possible to protect yourself.
To explore any of the above please contact us at National Debt Relief.
National Debt Relief belongs to a firm of leading chartered accountants who are one of the largest insolvency practices in the UK. We offer a complete portfolio of personal insolvency services in relation to IVA, Debt Management Plan and Bankruptcy. All our debt advice is confidential and with no obligation.