Cancel IVA if Unhappy

10/11/2024
Cancel IVA if Unhappy

It is possible to cancel your IVA if you are unhappy. However there are certain implications that you will need to be aware of.

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

How to cancel an IVA

If you have decided to cancel your IVA you can do so relatively easily. First stop your monthly payment by cancelling your standing order. You then need to tell the company managing the Arrangement you want them to fail it.

Generally you will have to confirm your instruction in writing. Most IVA companies will accept an e-mail but you might have to send a letter. They will then start the process of failing the Arrangement.

Once your IVA has been officially terminated, you will receive confirmation of this in writing. Because you are no longer in an IVA your details will be taken off the Insolvency Register. This normally happens within 3 months of the termination date.

Your IP is usually unable to fail your IVA until your payments are three months in arrears. During this time you are still protected from your creditors.

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 happens to the money your already paid into your Arrangement?

After you cancel your IVA your IP is allowed to draw their fees and costs from any money you paid into the Agreement. After these deductions any remaining money is paid to your creditors.

However it is likely that a considerable amount of the original debt you owed will remain outstanding. You are still liable for 100% of the outstanding balances.

Given this before you cancel you need to decide how you will manage the remaining debt. The options you might consider are a Debt Management Plan or Bankruptcy. However you could also start a new IVA

If you cancel an IVA within the first couple of years and your monthly payments were relatively low it is likely that all your original debt will remain outstanding.

If you Cancel an IVA do you have to go Bankrupt?

One of the concerns you might have about cancelling your IVA is whether or not you will be forced to go Bankrupt. In fact this would be very unusual. More often than not your creditors gain little or nothing by taking this course of action.

Even if you are a home owner your creditors will normally avoid making you bankrupt. They are far more likely to restart standard collection procedures against you such as employing debt collectors or applying for a CCJ.

The one exception is if you owe money to HMRC. They may have stipulated that if you do not meet the terms of your IVA you must be made bankrupt. If HMRC is a creditor you should not cancel your Arrangement before taking further advice.

Once your IVA has failed actually making yourself bankrupt could be a sensible option to consider particularly if you are not a home owner.

Reasons you might Cancel your IVA

You might want to cancel your IVA for a number of reasons. One of the most common is if you have suffered a change of circumstances. As a result you can no longer afford the agreed payments.

Alternatively since you started the agreement you may have had more time to think about your options. It is possible that you now believe that there is a better way for you to solve your debt problem.

Finally you may be unhappy with the Company you are working with. It is not possible to transfer your IVA to a different provider. However you could cancel it and start again with a different provider if you wish.

Need help with cancelling your IVA? Give us a call (0800 011 4712) or complete the form at the bottom of this page. The advice is free and confidential.

Share
Related Articles
Already in IVA 46

122 thoughts on “Cancel IVA if Unhappy”

    Ashleigh Craig says:
    25/03/2019 at 19:37

    I am looking for help and don’t know where the best place is to get it from.

    I have been in an IVA with Creditfix for a couple of years now. Every month I have been paying £68. In February they took a payment of £235 from my account with no warning, no letters. I did contact them and ask why, they advised me I can afford it which by the way they are very wrong.

    I have been in contact with them most of the month to get this payment down and I have had no help from anyone. I contacted my bank today to find out they have not been taking this from my account via direct debit or standing order but they have been manually taking it from my account using my long card number and 3 digits from the back of my card without permission, advising me this is what they are doing.

    Credit fix went Into administration over a year ago and taken over by Carrington Dean. I feel like I am being scammed out of more money than I should be paying back. They keep stating they will extend the time I will be paying this off. To my knowledge, an IVA in Scotland, once you had paid for 4/5 years what you can afford, the remaining was written off as this is government funded. Am I being scammed? Can I move my IVA to another provider. I can’t take being lied to or scammed by a farce company.

    Any advise welcomed. Thank you.

    Reply
      James Falla says:
      27/03/2019 at 10:54

      Hi Ashleigh

      There are a couple of things to get straight here.

      From what you have said I believe you are living in Scotland. As such I believe the solution you have is a Trust Deed not an IVA (only Trust Deed’s are available in Scotland not IVAs). You are right regarding the way a Trust Deed works. Once it is set up you normally pay for 4 years. After this time any debt that remains outstanding is written off. However the amount you pay each month is not fixed. It can increase if your income improves or your living expenses fall.

      I think you must have started your Trust Deed with Carrington Dean in Scotland. They were actually taken over by Creditfix Group in 2017. Creditfix have not gone into administration. As such I assume your Trust Deed is now being administrated by Credifix.

      I am not sure how you started making payments to Carrington Dean. However the policy of the Creditfix organisation is always to take payments from a debit card. This is known as a continuous payment authority.

      In terms of your ongoing monthly payments as I have said these can increase if your Trustee (Creditfix) believe you can afford more. If you are unhappy about what they have said the only way forward is to speak to them and sort it out. In the mean time you can contact your bank and tell them to stop the continuous payment authority for Creditfix until you agreement on the amount you will pay going forward.

      Reply
    Penny says:
    05/04/2019 at 14:35

    Hi I’ve been in iva since July 2017 ,I was paying £80 a month as I was paying 31.20 a week on hire purchase ..my payment was meant to change from 80.00 to 215 in December, i rang them in Feb to ask why they hadn’t taken their payment they told me I now in arrears as i should of been paying 215 so now my payments are 240 a month.

    I’m having to do overtime to make sure they get paid as a review said my payments will stay the same ..do I stay or try a different method. I’ve just been in a non fault rtc but been declined a courtesy car as I’m in iva ..so fed up

    Reply
      James Falla says:
      05/04/2019 at 14:49

      Hi Penny

      If you have been paying £80/mth into your IVA since July 17 you have paid in about £1440 so far (18 x £80). Given the arrangement is due to last 5 years you have about 42 to pay. At £240/mth this will be another £10,000.

      If you are struggling to make these payments you can cancel your IVA and use a different debt solution such as a debt management plan or bankruptcy if you like. However whether this is a sensible thing to do really depends on your wider circumstances.

      First and most importantly are you a home owner? If so then bankruptcy may not be an option. In that case you would need to use a DMP or start another IVA. Both of these solutions would mean you have to pay more payments than are remaining in your current IVA. As such they do not seem sensible option unless you absolutely cannot afford your current payments.

      If you are not a home owner then bankruptcy might be a better option for you. You may still have to make monthly payments towards your debts but they are likely to be more affordable and only last for a maximum of 3 years.

      Reply
    Ange says:
    23/04/2019 at 17:43

    my partner took out an IVA in 2015 he then straight away decided he did not want it and cancelled it. Our problem now is we are trying to get a mortgage but cannot remember who the IVA was with. it still shows on credit report as complete at 2017. We need to find out who it was with but are not getting anywhere fast. Could you helo?

    Reply
      James Falla says:
      25/04/2019 at 15:08

      Hi Ange

      This is a problem. If the IVA was cancelled then it no longer shows on the Insolvency Register. There is no public record of historic IVAs. As such there is absolutely no way of finding out who the IVA company was unless your husband can dig out some old paperwork.

      It is also important to understand that the record of the IVA will remain on your husband’s credit file for 6 years from the start date. As such in your husband’s case it will come off sometime in 2021. Until this happens it will be difficult for him to get a mortgage to buy a house.

      Reply
    Mark says:
    24/04/2019 at 01:28

    Hi I’ve been paying into my IVA for over a year now at £200 a month which I agreed on. My IVA company r demanding that my monthly payments go up to £243 a month. I have never missed a payment and this amount does not suit at all. Should I cancel my IVA and deal with my creditors on my own. My wages haven’t changed so what r my options.

    Reply
      James Falla says:
      25/04/2019 at 17:21

      Hi Mark

      I am surprised that your IVA payment has gone up if your income has remained the same. Has anything else changed? Have your expenses fallen recently? I would advise speaking to your IVA company first of all to see if you can get to the bottom of it.

      In terms of cancelling your IVA, if you really feel you cannot come to a mutual agreement with your IVA company then yes you can. However you should think carefully before doing this. Remember even though your payments have increased, once your IVA is completed it is likely the total amount you will have paid will be far less than the original debt you owed. As such completing the IVA will still deliver a significant benefit for you.

      The only time it is sensible to consider cancelling an IVA and paying your creditors yourself is where you simply cannot afford the required payments or if the total amount you are likely to pay in will now exceed the original debt you owed.

      Reply
    paul says:
    16/05/2019 at 02:14

    I joined IVA last year and only make one payment. I now have two job and I want to cancel my IVA because I can now pay the full payment through DMP. I what to I need to tell my IVA company for them to cancel My IVA.

    Reply
      James Falla says:
      16/05/2019 at 19:00

      Hi Paul

      There is no problem with cancelling your IVA if you want. As highlighted in section 2 of the above article you need to make sure you cancel any payments you have set up with your IVA company.

      You then simply need to contact them and tell them you want to cancel the arrangement. You do not need to give any reason but if they ask (which they probably will) you simply need to say that you have decided it is not the right solution for you and you will deal with your creditors a different way. They cannot stop you from cancelling.

      They will normally need something in writing from you to confirm your wish. Once the IVA is cancelled they will send you a termination letter. You can then set up a DMP with your creditors to repay them

      Reply

Leave a Reply

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