My IVA has Failed, What can I do

15/03/2023
My IVA has Failed, What can I do

Your IVA might have failed because you have been unable to maintain your agreed payments. Alternatively you may have cancelled it yourself. But what are the implications and what happens next?

Included in this article:

Already in an IVA and need help?

Give us a call: 0800 011 4712 or complete the form below to speak to one of our experts

The main reasons why your IVA could have failed

There are a number of reasons why your IVA could have failed. After a change in circumstances you may have been unable to afford the agreed payments. The IVA company may then have had no choice but to cancel the Arrangement.

Alternatively you may have been unhappy. Perhaps you decided it was the wrong solution for you or you no longer believed your IVA Company was supporting you or acting in your best interests. You therefore decided to cancel the Arrangement.

What ever the reason for the failure the implications for you and the funds you have already paid into the Arrangement are basically the same.

If you can’t afford to pay your IVA, speak to your IVA company about the possibility of reducing your payments. For more advice give us a call (0800 011 4712).

What happens to money already paid into your IVA?

After an IVA has failed any money you have paid into it is not returned to you. It is first used by your IVA Company to pay their fees and costs. Any remaining funds are then distributed to your creditors.

Whether or not anything will be paid off your debts will depend on how much you paid into the Arrangement. If you were paying less than £150/mth and the agreement fails in the first 12-18 months it is likely that all the money will be taken in fees.

This may seem unfair. However it is perfectly legal and forms part of the agreement you signed up to. Your Insolvency Practitioner (IP) is entitled to charge fees. The payments you make within the first year to eighteen months almost always go towards paying these unless your monthly payments are unusually high.

Struggling to get your head round all of this? We can help. Call us (0800 011 4712) or complete the form below. The advice is free and confidential.

What are your Options after your IVA has Failed?

After your IVA has failed you are still liable for your outstanding debt. You will have some time before your creditors start chasing you. Normally you will not hear from them for 3-6 months after you receive your termination letter.

But make no mistake, they will eventually begin enforcement action against you. Given this it is important to consider your options and put an alternative plan in place to manage your debt as quickly as possible.

If you want, you can consider starting an new IVA with a different IVA company. However you will have to start paying again from scratch. You may be in a position where you can repay your debt in full yourself in a reasonable period of time. A debt management plan might then be a better option.

Alternatively if you have no assets you could consider going bankrupt. Although this probably sounds scary it could be a very sensible option. If you have no surplus income and are unable to make further payments towards your debt you will not have to.

For free, confidential, advice after your IVA has failed, give us a call (0800 011 4712) or complete the form below.

Share
Related Articles
Already in IVA 46

10 thoughts on “My IVA has Failed, What can I do”

    Sarah says:
    10/11/2020 at 18:52

    Hi I’m in an iva with creditfix. My payments have gone up massively after my recent review and I’ll be paying far more than my original debt. I’ll really struggle with the new payment but they will not budge. I’m seriously regretting taking it out in the first place and feel ill be much better off paying the creditors myself or becoming bankrupt.

    I’ve been in it for 2 years and was paying 90 a month, they have put it up to 320. So my question is if I let it fail will I have to pay them anything?

    Reply
      James Falla says:
      10/11/2020 at 19:41

      Hi Sarah

      The problem you have outlined seems to be all too common with Credit Fix IVAs…. If you like, you can cancel your IVA and go bankrupt. To be honest, given you are not a home owner it is probably your best option (although I know it sounds scary).

      I confirm that if you decide to let your IVA fail you will not have to pay Credit Fix any more. However, you will lose the money you have already paid to them.

      I have a lot of experience working with people who have decided to stop their IVA and go bankrupt. I would be very happy to have a chat with you and talk you through the process. This advice is free and without obligation. Please call me on 0800 011 4712 if you would like to have a chat

      Reply
    Ken says:
    06/03/2021 at 12:37

    Hello.. Creditfix done the exact same thing to me.

    Smooth rolling for 4 years then the last year the payments went to high to afford. They ignored my every plea.

    My IVA will definitely fail and to be honest I’m numb and care free of it all now.

    Reply
      James Falla says:
      08/03/2021 at 10:11

      Sorry to hear that Ken

      If you want further help or advice in regards to what you can do next, please get in touch with me. I would be happy to speak to you (0800 011 4712)

      Reply
    Susan says:
    09/09/2022 at 15:03

    Hi James,

    I have a very similar issue with my Creditfix IVA, as Sarah does. In early 2018 my monthly payments started at £100 which were just about manageable. I started a new job which just about covered bills etc.. My new job involved the use of my car. My car broke down and was too old to fix so Creditfix agreed for me to take out a small loan to buy another so I could continue working.

    After taking out the loan with repayments of £205 a month, Creditfix then increased my IVA payments to £386. This is impossible for me to pay especially as a few months later I lost my job and the rise in fuel and food prices. The whole situation has had an extremely detrimental effect on my mental health…..antidepressants, suicial thoughts etc..

    I get no sense out of them over the phone so I emailed them to explain my situation. I offered to continue to pay £100 per month and asked that they reply to me in writing. They have not replied or acknowledged my email, but they have attempted to take and continue to try to take £386 from my account each month, which bounces back as there isn’t enough money. They constantly threaten me with bankruptcy via text and email if I don’t pay £386 plus arears now accumulated. I have an outstanding amount of approx £2300 left to pay on my IVA.

    I am sick from the stress, It’s constantly on my mind and do not sleep at night. Can you possibly give me some very much appreciated advice please?

    Thank you,
    Susan.

    Reply
      James Falla says:
      13/09/2022 at 10:35

      Hi Susan

      There are really only two options open to you. The first is come to an agreement with Creditfix that you are happy with. The second is to cancel your IVA and choose to manage your outstanding debt in a different way.

      It is difficult for me to advise the correct course of action for you without knowing more about your circumstances. If you are not a home owner, cancelling the IVA and going bankrupt might be a sensible option. However there might be implications for your car which would need to be considered.

      The one thing I can say is that I am certain that there is a sensible solution that will sort everything out and allow all the stress you are feeling to go away. I would be more than happy to discuss your situation and the options with you. Give me a call when you are free and we can have a chat (0800 011 4712). The advice is free and confidential.

      Reply
    NatashaR says:
    17/02/2023 at 11:22

    I have failed my Iva will I get debt collectors

    Reply
      James Falla says:
      17/02/2023 at 11:23

      Dear Natasha

      After your IVA has failed, your creditors will eventually start chasing you for the money you still owe. You will need to decide how to deal with these moving forward.

      Reply
    Alex says:
    02/07/2023 at 10:20

    Hi there

    I have a problem with my IVA .

    My work have now cut my hours and losing 28hours a month I’ve let my iva know the situation and updated my income and outgoings on their site which clearly states I cannot afford the £300 per month anymore and its been 4 years & 6months never a problem. Only 6 months remain

    The problem is they take 1 month to reply to any emails. I emailed and emailed & called but they only have a message board that can take payments and cannot help with anything.

    I’ve not paid this month now first missed payment ever but I can’t pay until the price has been adjusted.

    Am I right to just wait it out until they reply and the situation is sorted? Or at least revised?

    It’s unreal how slow at responding they are.

    Surely if they just cancel my iva without even replying to my situation I’d be able to turn that around too?

    Reply
      James Falla says:
      03/07/2023 at 12:55

      Hi Alex

      Sorry to hear about the difficulty you are having with your IVA company. If you are simply unable to afford your ongoing payment, suspending your payments is really the only thing you can do until the issue is sorted.

      I suspect that the company will contact you pretty quickly once they realise your normal payment has not been made. With any luck, you will then be able to discuss your revised income and expenses with them.

      As long as you can still pay a reasonable amount, I am sure they will be able to reduce the payments for you. However you will need to expect this to go hand in hand with an extension of your IVA. Perhaps an addition 12 months of payments. You can read more about this by clicking on this link: Reduce your IVA payments

      If you would like further advice about this and to discuss your options, please give me a call (0800 011 4712). The advice is free and confidential.

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *