When you first signed up for your IVA, you will have agreed on a set of terms, based on your circumstances at the time. Of course, neither you nor your Insolvency Practitioner can accurately predict the future - and if you run into financial difficulties during your IVA, you might find that you can`t keep up with your repayments.
If you miss a number of IVA payments (typically three), you will usually receive a `Notice of Breach`: a formal notice telling you that you have breached the terms of your IVA. This will warn you that the situation must be rectified (usually within a month), and it may ask you to explain why you have been missing payments.
If you can`t make up for the missed payments and your problem can`t be solved, your IVA will fail and you may be made bankrupt. However, there are things you can do before the situation gets to this point.
The first thing you should do if you`re having problems is speak with your IP. They are not just there to report on the month-to-month running of your IVA - they`re also there to help you if you run into trouble.
Exactly what your IP can do to help will depend on your circumstances. If your problems are only expected to be short-term - you might have been made redundant, for example, but you expect to be back in employment before long - most IVAs will have some kind of terms for dealing with this situation. Your payments may be suspended for up to 6 months in some cases, but after this period, if you cannot resume your monthly payments, your IVA may fail.
If your situation is likely to be more long-term, but you can still afford to contribute some money each month, your IP may suggest an IVA variation. This is a legal alteration to your IVA terms, which must be approved in the same way as your original IVA.
However, if it looks unlikely that you`ll be able to contribute a reasonable amount to your IVA in future - and especially if you`ve only made limited contributions to your IVA so far - your IP may be unable to gain sufficient support to keep your IVA going and it may have to fail.
If this happens, you will need to look at alternative solutions for dealing with your debts. Your IP or an independent debt adviser will be able to help you decide which solutions are appropriate.
Whatever you think the outcome is likely to be, it`s important for you to get in touch with your IP at the first sign of trouble. The sooner your creditors are informed and your situation has been discussed, the more likely it is that your IVA can be prevented from failing.
For more advice on IVA problems, or for any other information regarding IVAs, click here or call us on 0800 195 2911.
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