You can change your IVA to a different solution if you feel this solution is no longer right for you. However, before doing so, you need to understand the implications.

Included in this article:

• How do you change your IVA to a different solution?
• How much debt will you still owe?
• Should you change to a debt management plan?
• Should you go bankrupt?

Need help to change your IVA to a different solution? Give us a call (0800 077 6180) or complete the form below. The advice is free and confidential.

How do you change your IVA to a different solution?

Before you can change to a different debt solution, you first have to stop your IVA. This can be done at any time during the Arrangement.

First, you need to cancel your monthly payment. If you pay via standing order, you can simply cancel this with your bank. Where your payment is taken from your debit card, the best way to stop it is to report the card as lost or stolen. The bank will issue your new one with a slightly different number.

Your IVA company is likely to contact you when they realise you have stopped paying. At this point you can tell them to terminate the agreement. They may try to convince you to keep going but they can’t stop you if your mind is made up.

If you are a home owner, you will need to ensure that the IVA company also removes any restriction they put on the property at the land registry.

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.

How much debt will you still owe after you stop your IVA?

After your IVA is cancelled, you will still owe the total of the debt you had when you started minus whatever has been paid to your creditors.

However, not all of the money you paid into the agreement will have been used to pay off your debt. Your IVA company will have taken some of this to cover the fees and charges it has incurred. As such, it is likely you still more than you think.

It is possible that nothing at all has been paid to your creditors. This is likely to be the case if your payments were £150/mth or less and you were in the Arrangement for less than 2 years,

This situation is quite legal and there is nothing you can do about it. It is simply something you have to accept if you decide to change your IVA to a different solution.

Should you change to a debt management plan?

Changing your IVA to a debt management plan can be a particularly good solution if your income has increased and staying in your IVA would mean you will end up paying more than you originally owed.

Using a debt management plan is likely to mean you have to repay everything you owe. But if by using this solution, you become debt free faster and more cheaply than staying in your IVA, it is likely to be a sensible option.

It is also a good solution if you are a home owner with equity. This is because your property does not have to be involved.

You can’t start a debt management plan until you get a formal termination letter from your IVA company. Your creditors won’t agree a payment plan until you have this.

Should you go bankrupt?

You may be surprised, but changing from an IVA to bankruptcy can be a better option than a debt management plan. This is particularly the case if you live in rented accommodation as your home will not be affected.

Going bankrupt can also really help if your income has fallen and you can’t afford to make further payments towards your debts. Any money you owe will just be written off, and you will not have to make any further monthly payments.

Where you can still afford to pay towards your debt each month, you will still have to do this. But your payments will only last 3 years. This means that if it would take you longer than 3 years to pay off your debt using a debt management plan, going bankrupt is likely to actually save you money.

There is an up front charge to go bankrupt. However, once you have stopped your IVA payments, you will have time to save for this. Your creditors will not start chasing you until you have your IVA is formally terminated which could take 3-6 months or longer.

Want to stop your IVA and use a different solution. Call us (0800 077 6180) or complete the form below. The advice is free and confidential.