My IVA payment has gone up – what can I do

My IVA payment has gone up – what can I do

After your annual review, you may find your IVA payment has gone up. Why do IVA payments increase and what are your options if they do?

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Already in an IVA and need help?

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Why has your IVA payment gone up?

IVA payments are not fixed. It is common for your IVA company to put them up after doing an annual review. Your payments will go up if your income has increased.

Payments also go up if your living expenses have reduced. Reasons for this may be that one or more of your expenses have now stopped. For example if you have finished paying for car finance.

Your IVA company is normally allowed to take around 50% of any increase in your surplus income and add this to your monthly payment. If your income increased a number of months before your review, you may also have to pay an additional lump sum to make up the arrears.

If your payment has gone up, this does not reduce the length of your IVA. You just repay more of your debt.

What if you can’t afford the new payment?

If your IVA payment has gone up but you think this is wrong, first speak to your IVA company. Where mistakes have been made, they may be able to reduce the payment.

Perhaps your income only increased temporarily during the last year and has now gone down again. They may not realise this from the information they used to do the review.

You may believe that corresponding increases in your living expenses have not been taken into account. Perhaps you now have additional travel or child care costs. You need to make sure that your IVA company has included these in your expenses budget especially if they were not there originally.

Think about what the increase in your payment will mean in terms of the amount you pay back overall. If you will now repay more than you originally owed, your IVA may no longer be a sensible solution for you.

Can you stop your IVA and do something else?

If you are unhappy or you feel you simply can’t afford the new payments, and your IVA company won’t budge, you might be better off stopping the Arrangement altogether.

You can cancel your IVA at any time. However before doing so you must think about the implications. You also need a plan for how you will deal with your outstanding debt going forward.

You might decide it is better (and cheaper overall) to just repay the balance of your debt yourself using a debt management plan. Alternatively, if you are not a home owner, going bankrupt will almost certainly mean your payments are reduced or cancelled altogether.

Have your IVA payments gone up? Talk to us about your options and what you can do. Call 0800 011 4712 or complete the form below.

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2 thoughts on “My IVA payment has gone up – what can I do

    Martin says:

    hi I’m in iva with creditfix they were OK for 2yrs. I was paying £100pcm over these 2yrs my monthly wages went up by about £100 so now they want me to pay after annual review £200pcm. Can they do that?? before I started iva my monthly payment for my loan was £250

      Hi Martin

      This does not sound quite correct. Yes, if your income goes up during an IVA, you must expect your IVA payments to go up as well. However, the increase should be no more than 50% of any extra surplus income.

      In other words, if your original payment was £100/mth but your surplus has now increased to £200/mth, the extra £100 should be split 50/50 between you and your IVA company. So, your payments should only increase by £50/mth to £150/mth.

      I suggest you speak to Creditfix and ask them exactly how they have calculated your increase. It is possible they have made a mistake and should reduce your payments

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