Can you stop an IVA if you are Unhappy?

How to Stop IVA if Unhappy There may be various reasons why you want to stop an IVA. If you have made the decision to do so it is certainly possible. However it is important that you are aware of the implications.

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Why would you want to stop an IVA?

There are a number of reasons why you might want to stop your IVA. You may feel you choose the wrong debt solution. Having had time to reflect perhaps you believe an alternative might be more suitable.

It is possible that your circumstances have changed. Perhaps your IVA company has asked you to increase your monthly payments and you feel you are unable to afford this.

Alternatively your situation may have become worse and you are no longer able to maintain your payments. If a sensible agreement to reduce them cannot be reached you may be forced to stop the Arrangement.

Deciding to stop your IVA is not something you should undertake lightly. It could mean you will lose the money you have already paid in. You will also remain liable for your outstanding debts.

Stopping your IVA if you are a Home Owner

You may have heard that if you stop paying your IVA and allow it to fail your creditors will make you bankrupt. If you are a home owner this action would put your property at risk.

In fact even if there is considerable equity in your property it would be very unusual for creditors to force you into bankruptcy. This is because they lose control of the collection process and are unlikely to recover what they are owed.

Once they are informed that your IVA has failed they are much more likely to simply restart traditional debt collection activities against you. These could include employing debt collectors or applying for a CCJ.

If one of your creditors is HMRC they are likely to try and make you bankrupt if your IVA fails. Do not allow your Arrangement to fail without getting advice if you owe money to HMRC.

Implications of stopping an IVA if you are renting

Any rented property you are living in is unlikely to be affected if you stop your IVA. Your landlord was probably not aware that you were in the Arrangement in the first place and will not be told that it has failed.

However it is likely that you will still owe the same amount as when the Arrangement started. You will therefore need to put a plan in place for dealing with this. It is unlikely that any of your creditors will make you bankrupt.

As you have no property to lose you could consider making yourself Bankrupt. Alternatively you may feel a different option such as a Debt Management Plan or even starting a new IVA is better for you.

If your IVA fails you are still liable for all your outstanding debt. You must therefore have a plan in place to for dealing with this moving forward.

How to stop an IVA once it has started

If you have decided to stop your IVA the process is relatively simple. The first thing you need to do is cancel the payment you are making into the Arrangement.

You will then need to inform your IVA Company. They may try to talk you out of your decision but ultimately they cannot stop you from letting your IVA fail. They will normally require you to put your request in writing.

Your Insolvency Practitioner will write to you giving formal confirmation your Arrangement has failed. After this your name will be taken off the Insolvency Register.

Your IVA Company usually cannot fail your IVA until your payments are 3 months in arrears. As such if you are up to date you will have to wait up to 3 months for the failure to take place.

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4 thoughts on “Can you stop an IVA if you are Unhappy?

  1. Sheff says:


    I am thinking about stopping to pay my IVA. I’ve recently had a pay rise so feel if they were to increase my payments I would be paying more in than I intially owed when I went into it. Can they make me pay in more than I owed?

    Can I stop it and repay my debts without there help? If so can the Iva company charge me if I fail it?

    1. Hi Sheff

      Your situation is not uncommon. It is possible to get a pay rise during an IVA. The resulting increase in your monthly payment can then mean you would pay back more than you originally owed (if you continue to pay all the outstanding payments).

      Your IVA company are within their rights to ask you to do this. The terms of your IVA will state that if your circumstances improve during the Arrangement you are liable to pay the full amount of debt that you originally owed plus the IVA company’s fees plus interest on the the origianl debt at the rate of 8% per year (from the start date of the Arrangement). This can mean you end up paying back thousands more than you originally owed.

      If you are facing this situation you can certainly let your IVA fail and then negotiate a payment plan directly with your creditors. If you do this your IVA company cannot charge you any more. However remember all (or a substantial amount) of the money you have already paid into the Arrangement will be taken by your IVA company to cover fees they have already incured. As such you may still owe most if not all the debt you owed when you started your IVA.

  2. Janet Leighs says:

    Hi I have been with Knightsbridge Debt Solutions with my IVA for over 3 years and they sold the debt to Creditfix. They have not adhered to my wishes and have put my payments up by £28 I have offered £90 per four months.

    They keep sending the emails to my partner who I have said will not deal with them and they must deal directly with me and me only as it is my benefits which pay this debt. They have not sent me details of why the money has gone up and what findings they have.

    I would love to change my IVA provider, if Knightsbridge can sell my debt to someone else why cannot I find a new provider? Hope you can assist as I find this company very poor and not customer savvy. Other things have happened saying our payment was not received 2 days after if left my account luckily I have a standing order with them so they cannot change the amount without me doing so.

    1. Hi Janet

      Sorry to hear about your experiance with Credit Fix. Unfortunately it is not possible to change your IVA provider. As such you have only two options. The first is to somehow find a way to continue working with Credit Fix. If this is not possible your only other is to let your current IVA fail.

      Once your current IVA has failed you are free to start a new one with a different provider if you wish or chose a different debt solution. However remember that it is likely that you will lose the money you have already paid into your current arrangement.

      Given this if are living in rented accommodation (or have no equity in your property) then many people who to fail their IVA then decide the best option for them is actually to go bankrupt. Although this sounds bad if you are not a home owner it is really no worse than being in an IVA. In addition if your only income is benefits then you would not have to make any further payments towards the debt and it would be written off after 12 months.

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