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.

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122 thoughts on “Cancel IVA if Unhappy”

    Sally says:
    21/11/2019 at 17:34

    Hello.

    I am currently in an IVA (approx 2.5 years) and originally took it out with Knightsbridge, who I was very happy with. Payments were set at £127 p/m and that is affordable for me. The IVA was then transferred to creditfix without my knowledge, and i have had nothing but problems since, missed payments (they just havent taken them) or returned payments once they have been taken, and they are continually stating this is my banks error – I have checked with the bank, it is not.

    I have recently taken on three foster children (family members) and need a larger car as a result. I was allowed to maintain my current HP agreement as the car cost was minimal each month and needed for work and my own daughters schooling, but it is a 4 seater convertible and now unsuitable as there are 5 of us. I have approached Creditfix who have advised as my payments keep missing (not my issue, theirs), they cannot authorise me to return my current car and gain a new HP arrangement with a new firm for a bigger car.

    My income has significantly increased due to fostering allowances, but that is not my expendable cash, it is for the children, that said, i believe cancelling this IVA, then starting again with a new one, and a new IVA company after getting a new car HP agreement would be beneficial? What are your thoughts?

    Reply
      James Falla says:
      21/11/2019 at 17:45

      Hi Sally

      Sorry to hear about your frustrations with Credit Fix. If you feel you cannot find a way forward with them there are a couple of options.

      Firstly you can cancel your IVA and start a new one with a different IVA company if you wish. You could sort out a new HP agreement beforehand so that would be fine. However you must understand that it would mean starting again from scratch and paying for another 5 years….

      Secondly you could consider cancelling your IVA and using a different solution such as bankruptcy. This would definitely be something to think about if you are not a home owner. As with the IVA you could sort out a new HP agreement before using this option. The additional advantage is if you do have to continue making payments they would last 3 years only (24 months less than a new IVA…..).

      By all means get in touch with me if you would like to chat these options through.

      Reply
    Maurice says:
    21/11/2019 at 17:58

    Hi

    I have an Iva and the company I chose were taken over by another company . This company has lied and cheated me out of more money. Is there some sort of extenuating circumstances that can transfer my Iva to a new company ?

    Reply
      James Falla says:
      21/11/2019 at 18:03

      Hi Maurice

      Although it may seem unfair it is not possible for you as an individual to transfer your IVA to another company under any circumstances. If you cannot find a way forward with your new IVA provider your only option is to cancel your Arrangement.

      You can then start a new IVA with a different company or manage your debt in a different way. These are the only options I am afraid.

      Reply
    Charlotte says:
    09/01/2020 at 19:46

    I am currently in an IVA with a company and have been since June 2019. i am not happy with their level of customer service. they were more than cooperative prior to my IVA being completed but since i have little or no communication from them. i am sorting all of the letters, emails and calls out myself with no assistance from them.

    How likely is it that an iva would be accepted from a different company if i was to cancel my current one?

    many thanks

    Reply
      James Falla says:
      09/01/2020 at 19:55

      Hi Charlotte

      It is more than possible a new IVA with a different IVA company would be accepted. However there is of course no guarantee. If you are not a home owner you do have the fall back option of bankruptcy. In that scenario I would be confident in advising you to cancel and try again because if your proposal was refused you could simply go bankrupt and be no worse off (in fact probably better off).

      Reply
    Lina says:
    30/06/2020 at 13:59

    I am writing as I have signed up for IVA around two years ago, my total debt was around 9k and repayments were set for £217 a month. However, after paying for two years now I have realised that my debt not only haven’t reduced – because of the added fees to has only increased! Isn’t IVA supposed to be helping people? Not driving them further in debt?

    Today I have also received a message from them saying that my monthly payments will go up to £317 a month now, which doesn’t even make sense, as because at the end of my plan I will have repaid over 20 000 pounds instead of my original £9000 debt.

    Was wondering if it is possible to cancel my arrangement and try to put a payment plan in place with my creditors myself instead? I wonder how would creditors react to such a proposal from me, is that even possible to do?

    Reply
      James Falla says:
      30/06/2020 at 14:13

      Hi Lina

      I am concerned that you started an IVA in the first place. If the original agreement was that you would pay £217/mth for 5 years, during the course of the Arrangement you would have ended up paying £13,000 (£217 x 60). This is £4000 more than your original £9000 debt. If this is correct, there is no way you should have been advised to start an IVA. Based on the information you have given, I believe the IVA company you are with (whoever they are) were wrong to let you start the Arrangement.

      No-one should start an IVA if it will mean they will repay more than they owe. This just does not make sense. It certainly seems that a better solution for you from the start would have been a debt management plan. Given you are not self employed you could have got this set up for free through a debt charity called step change. Most if not all of your creditors would have frozen their interest charges and based on payments of £217/mth you would have paid off your debt in just over 3 years.

      If your IVA company now want to put your payments up this means your IVA makes even less sense. I would advise you to consider stopping the arrangement and then paying off your debt using a debt management plan (DMP). You are certainly allowed to do this. You could set the plan up yourself or use step change to help you. The only thing to bear in mind is that the payments you have already made into your IVA are likely to be lost so you will still owe the £9000 you started with. There may also be implications if you are a home owner. If you are, I would advise not taking any action until you speak to us for more advice.

      Reply
    Glen says:
    03/07/2020 at 12:05

    Hi, I have an IVA that is now 13 months old. I recently completed a yearly review an noticed that they have stated I have a second income, which I do not. I am paying £411 pm which is proving difficult. 3 weeks after submitting the review and changing the details to make it clear I do not have a second income (and never have) I have not had anything back from them. Unless they are seeking payment they are very difficult to get hold of via telephone or email. I am thinking to cancel the next payment to get their attention and ask for my payments to be reduced. Is this a good idea or no?
    Regards

    Reply
      James Falla says:
      03/07/2020 at 16:45

      Hi Glen

      I would suggest that you continue making your original payment until this situation is sorted out. Your IVA company should not expect you to increase your payment without you first having the opportunity to discuss the reasons with them and put your case to them if you believe they are incorrect.

      If you can’t make them see sense and want a second opinion please do give me a call (0800 011 4712) and I would be happy to discuss your options with you.

      Reply

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