When you first entered into your IVA (Individual Voluntary Arrangement), you will have met several criteria to determine your eligibility for the IVA.
However, people`s circumstances can change - and if your own situation has changed to the point where your existing IVA terms are proving difficult to keep up with, then a change in terms might be required.
A change in the terms of your IVA is known as an `IVA variation`.
An IVA variation is a change in the terms of an existing an IVA to suit your new circumstances.
Although your original IVA terms are legally binding, most lenders would rather come to some kind of compromise than allow your IVA to fail due to difficulties with your payments. So, for example, if your income has fallen so much that you can`t afford your existing IVA payments, your lenders may agree to reduce your monthly payments.
An IVA variation must be approved in the same way as any other IVA terms. You will work with your IP to draw up your new IVA proposal, and the new terms must be approved by voting lenders accounting for 75% of your total debt. If this happens, your new IVA terms will begin.
If your IVA variation is rejected, you can either continue with the existing terms (if it`s possible to do so), or ask to extend the repayment terms - so you`ll pay the same amount as originally proposed - or you could end your IVA and go for an alternative debt solution, such as a debt management plan or bankruptcy.
It can be difficult to know what is the right option for you in this situation, which is why you should always speak to your Insolvency Practitioner, or an independent debt adviser, to discuss your options.
For more information on IVA variations, click here or call 0800 195 2911.
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