Money Advice, Debt Advice & Debt Help
Can you stop your IVA if you are Unhappy?

Can you stop your IVA if you are Unhappy?

Can you stop your IVA if you are Unhappy?

It is possible to stop and IVA if you are unhappy with the Arrangement. But you need to be aware of the implications.

Included in this article:

 

Rather speak to a person? Call 0800 077 6180 or fill in the form below and we’ll call you

How to stop your IVA

You can stop your IVA after it has started if you wish. The agreement is legally binding on your creditors and they are not allowed to break it. However you can.

You might want to do this if you believe you picked the wrong debt solution. Alternatively, you may be no longer happy with your IVA company.

Whatever the reason, if you decide 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. Then, you need to inform your IVA Company. They may try to talk you out of your decision but ultimately they cannot stop you.

It will normally take between 3-6 months for your IVA to fail. You will then receive a letter from your IVA company confirming that the Arrangement has been terminated.

Struggling to get your head round all of this? We can help. Call us (0800 077 6180) or complete the form below. The advice is free and confidential.

What happens to the payments you have already made?

When you stop an IVA much of the debt you had at the start is likely to remain outstanding. This is because your IVA company is allowed to deduct their fees and costs from the payments you have already made.

If the payments you have been making each month are only £100/mth or less it is very likely that all of the money will be taken in fees. Your original debt will only have reduced if your payments were much larger.

Given this you will need to put a new plan in place for dealing with your debt. Depending on your circumstances you might consider starting a new IVA. Alternatively if you are not a property owner or have no equity in your home going bankruptcy could be the fastest way to become debt free.

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.

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. In fact even if there is considerable equity in your property it is very unlikely they would take this action.

The reason is they would lose control of the collection process and are unlikely to recover what they are owed.

As such if you stop the Arrangement they are much more likely to simply reinstate 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.

Want advice about stopping your IVA? Call us (0800 077 6180) or complete the form below. It’s free and confidential.

Arrange a call with an IVA Expert

    Need help to start a Individual Voluntary Arrangement?



    Privacy Policy
    Your information will be held in strictest confidence and used to contact you by our internal team only. We will never share your details with any third party without your permission.

    55 thoughts on “Can you stop your IVA if you are Unhappy?

    1. Kim says:

      I am currently with creditfix I think my debts are about £8000 but I’m sure a couple of the companies have since dissolved so this may be less. Ive made 2 payments so far. I’ve found the iva is very restricting. Most of the debts are payday loans (silly I know) can i actually just cancel the payments and set up individual payments to each or ask for a settlement figure? As i may be in an position soon to pay some of the smaller ones off. I want to start improving my credit score! Also will the iva still show on my credit file after it has failed? If so how long for?

      1. James Falla says:

        Hi Kim

        You can stop your IVA and pay your debts yourself if you want. However there are some things you need to be aware of before you make your decision:

        1. You will still owe the full amount that you owed when you started your IVA. If any of your creditors (for example payday loan companies) have stopped trading then you will still owe the money to the liquidator in charge of closing that business. The only way this is not the case is if you successfully make a claim against them for miss selling.

        2. If your stop your IVA your credit score will NOT improve. The record of the IVA will remain on your credit file for the full 6 years whether you stop it or not. As such your credit score will remain poor for 6 years whatever.

    2. NIkki says:

      Hi, Please can you advise….if I cancel my IVA and discuss with creditors how will I know how much has been paid to which creditor? I have had a breakdown of receipts and payments and as far as I can see they have dumped all the funds into an HSBC holding account after taking their fees. (There is around 5k in there) will this money be lost or has it actually been distributed or will it be distributed on the cancelling of the IVA? Any advice welcome.
      Thank you Nikki

      1. James Falla says:

        Hi Nikki

        After your IVA has been cancelled you should be able to get a schedule of what money has been paid to whom. If you believe that after fees there will be money left over to distribute to creditors then this is what will happen.

        Ultimately your IVA company will send you a report confirming the amount paid out to creditors. However they may not break down exactly who has been paid what. However the funds will have been distributed to creditors on a pro rata basis (ie each will get a percentage of the funds available based on the percentage of the total debt they are owed). As such you should be able to work out pretty accurately how much each has received.

        That said when you start negotiating payment plans with each they will confirm the outstanding balances to you.

    3. Jane says:

      I have just cancelled my iva. How long does it take before I hear from them? I am supposed to pay £234 a month and it a lot as I’m zero contracted hours

      1. James Falla says:

        Hi Jane

        If you have cancelled your IVA payment you will normally hear from your IVA company once the next scheduled payment is missed. Having said that some companies can take longer as they are not so “on the ball”.

        If you want them to cancel the arrangement then I suggest you contact them directly yourself and confirm that is what you want.

        Have you considered how you will manage your debts moving forward? Please contact us if you need further help or advice.

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    Learn how your comment data is processed.