You can legally cancel your IVA part way through if you want. You are then free to pay your remaining debts yourself. Or, you can use a different debt solution to manage them.
Included in this article:
- Is it legally possible to cancel and IVA?
- How much debt will you still have to pay?
- How to pay off the remaining debt yourself
- Would you be better going bankrupt?
Want to cancel your IVA? Call us for advice (0800 077 6180) or complete the form below. It’s free and confidential.
Is it legally possible to cancel an IVA?
You are legally allowed to cancel your IVA at any time during the Arrangement. This means you can stop it and pay your debts yourself if you want.
The way you cancel is first, stop making your payments. You don’t need permission to do this. You just stop further payments coming out of your bank. If they are taken from a debit card, you might have to cancel the card and get a new one.
Once you have stopped your payments, your IVA company is likely to chase you. At that point simply tell them you want to cancel. They might try to change your mind, but they have no legal power to force you to continue with the agreement if you don’t want to.
Your IVA company can’t charge you any more money.
It will normally take between 3-6 months for your IVA to be officially terminated. You will received a confirmation letter from your IVA company once this has happened. 3 months later your name will come off the insolvency register.
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 have to pay?
After your IVA is cancelled, you still have to pay all the debt you still owe to each of your creditors.
This is not just the remaining amount you agreed to pay into your IVA. If you cancel, your creditors will demand you pay the total amounts you originally owed them at the beginning.
You might expect that the original balances you owed would be lower now because of the money you paid into your IVA. However, they may not have gone down as much as you think.
This is because not all of the money you paid will have been used to pay off your debts. Some will have been held back by your IVA company to cover their fees and costs. This is perfectly legal.
As a rule of thumb, if when you stop paying and you have been in the Arrangement for less than 18 months, the amount of debt you still owe will be the same as when you started. If you have been in longer the balances may have reduced. But not necessarily by very much.
After you stop your IVA, your original debts may not have gone down by much because some of the money you paid in will have been used to pay costs and fees.
How to pay off the remaining debt yourself after you cancel your IVA
Once your IVA is cancelled, you are allowed to pay the outstanding debt off yourself.
Remember, you will not be able to do this until the agreement is officially terminated. You will know when this has happened because you will receive a letter from your IVA company confirming the termination and that they are no longer supervising the Arrangement.
You will also get report showing how much (if anything) has been paid to each of your creditors.
There is no point trying to speak to your creditors before you have confirmation of the termination. This is because they can’t agree a payment plan directly with you until then.
After you have received your termination letter, you are free to negotiate directly with everyone you still own money to. You can set up a monthly payment plan with them if you like.
Alternatively, you can offer to settle your debt for less than the total balance owed with cash lump sums if you have money available.
Want assistance negotiating a payment plan or settlements with your creditors after cancelling your IVA? Call us (0800 077 6180) or complete the form below.
Would you be better off going bankrupt?
You might want to cancel your IVA, but paying off your remaining debts with a monthly payment is still going to take a long time (more than 3 years). In these circumstances, you should consider just going bankrupt.
This is likely to be a sensible option if you are not a home owner and the amount you can afford to pay towards your debts each month is relatively small.
Once you are bankrupt, you will only have to make ongoing monthly payments for a maximum of 3 years.
If your only income is benefits or you have a very low surplus, you will not have to make any further payments at all. You would therefore be debt free in just 12 months.
Another advantage of going bankrupt for someone in your situation is that you can do it as soon as you like. You don’t have to wait for your IVA to be officially terminated.
Want more advice about cancelling your IVA and what to do next? Call us (0800 077 6180) or complete the form below. Its free and confidential.
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I have 9 months left on my iva and they have put my payments up a lot as I earned more. From last year I suffer with server mental health and just want to pay it off but I don’t have the funds to do that. My family would help but they don’t want to give information about there banks and wages. I’ve actually paid more than my debt which is not good as I could of paid this off my self.
I don’t think an iva was the best for me im sick of not been able to have any spare money. Can I cancel my iva and make arrangements to pay this off? its making me ill Help!
Hi Emma
Firstly, I would say that if you only have 9 months left to pay on your IVA, it would be a great shame to cancel now. You can cancel if you want. However, your IVA company will take money from the amount you have paid in to cover their fees. As such you will probably end up owing more than you think. Given this, I would advise you not to cancel if at all possible.
If your family can help you to settle, this would be a good option. You can reassure them that they only have to provide information to satisfy the financial money laundering checks. So they should only need to provide prove their ID (copy of passport or driving license) and proof that the funds are coming from a UK bank account – a copy of the first page of a bank statement will be enough. They do not have to give any info about their income or copies of wage slips….
Hi,
I started my IVA in March 2019 initially on a 5 year contract. I was initially paying £90 a month but after the first year they upped it to £159 as they saw few gambling transaction on my statement (my boyfriend used my account maybe 6 times), without my wages going up this was near on impossible for me and sent me into a state of depression.
After struggling to pay this for 2 years they called me and offered to lower it to £110 due to the cost of living going up etc which I agreed to but I hadn’t realised this meant my contract extended by another year.
My IVA was originally due to end in March 2024 but after realising it isn’t until 2025 im full of anxiety already. What would happen if I cancelled after the original 5 year contract? Most of my debts by then will be 6-10 years old, will they all still chase for the original amount? I feel so lost and really don’t know what to do. Thank you.
Hi Danielle
I confirm that you can cancel your IVA at any time if you decide it is no longer the right solution for you.
After the IVA company cancel the Arrangement, they will write to you with a statement confirming how much of the money you paid in went in their fees and how much was paid to your creditors. You will still be liable for the balance owed to the creditors and they will start chasing you for this amount.
Given this, I always recommend that you decide on your next course of action in advance. This might be putting a payment plan in place with each creditor to pay them. However, this would only be sensible if you can afford to pay them in a reasonable time.
If you will struggle to make ongoing payments, then you should consider the option of just going bankrupt. If you are not a home owner, this can be a very sensible solution because you only have to make ongoing payments towards your debts if can afford to. If not, there are no further payments and you are free of your debt after 12 months.
If you are interested, you can read more about this process by clicking on the following link: Stop your IVA and go Bankrupt
If you would like to talk through your options with me, by all means give me a call (0800 077 6180). The advice is free and confidential.
Hello, I’m currently in an IVA. I don’t feel like I need it anymore, and i feel like I could manage my debt using a DMP. My financial situation has got better and I could afford to make bigger payments to my debt. BUT I am a homeowner and I have a child, I’m just trying to gage what the likelihood is that my creditors will make me bankrupt?
Hi Ffyona,
If you cancel your IVA, and then start paying the debts yourself, it would be very unlikely that any of your creditors would make you bankrupt. It would only be a risk if you owe a large amount to HMRC and they have stipulated in the IVA that you should be made bankrupt if you don’t pay it.
If you do decide to cancel, as long as you put sensible payment agreements in place with your creditors to pay them, they should be happy.
You can read more about whether or not creditors are likely to make you bankrupt by clicking on the following link: Will my creditors make me bankrupt?