Payment Problems During My IVA
If you believe that you are about to default on your IVA payment you should speak to your IP as soon as possible.
Since the introduction of the IVA protocol in February 2008, the supervisor of protocol compliant IVAs has the discretion to provide assistance to clients struggling to maintaining their IVA payments.
They can provide a payment reduction, or a payment break.
Protocol compliant IVAs provide the supervisor with discretion to reduce IVA contributions by upto 15% of the agreed payment, without having to seek creditors' approval.
So, if your IVA is protocol compliant and your normal IVA payment is £200 per month, your supervisor can, at their sole discretion, reduce your IVA payment to as low as £170 per month without the need to call a variation meeting.
If this reduction doesn't provide sufficient respite, or if you are in a non-protocol compliant, IVA then your supervisor can seek a variation to the original terms of your IVA.
Seeking a variation to the original agreement will require another creditors' meeting to be called, so creditors can vote on whether they accept or reject the offer of a lower payment.
Since the introduction of the revised IVA Protocol on 1st October 2016, there has been a change in the length of time that can be given as a payment break during an IVA.
Protocol compliant IVAs entered into before October 1st 2016 provide the supervisor with discretion to implement a single payment break for a period of upto 6 months.
But, in contrast, protocol compliant IVAs entered into after October 1st 2016 can now benefit from a break of upto 9 months.
The premise for a break remains the same in that with the permission of your supervisor a payment break can be given without the need to seek creditors' approval and, once the break has been sanctioned by the IVA Supervisor, all contributions to the IVA are temporarily stopped for the agreed term of the break.
When a payment break is agreed, the original term of the IVA is extended by an equal amount of months to that of the break, to ensure creditors are not disadvantaged and, therefore, still receive their expected dividend from the IVA.
If, after the break, it is still not possible to resume payments, the supervisor can approach creditors and seek a further extension to the payment break.
Voluntary Payment Defaults
If you simple want to bring your IVA to an end as quickly as possible, then defaulting on your payments will achieve this for you.
However, voluntarily defaulting on your IVA payments may lead to you being made bankrupt so, if you are looking to terminate your IVA, you should talk to your supervisor as they are in the very best position to offer you constructive and practical advice.
Please note: There are companies that search for potential customers by searching through the IVA register. They contact people in IVAs and ,sometimes, make false claims relating the IVA. Their strategy is to unsettle consumers with suggestions of IVA mis-selling. They also often claim to be investigating the insolvency practitioner's conduct and advise payments into the IVA to be stopped.
These companies are searching for bankruptcy clients. Their purpose is to charge huge and unnecessary fees for their assisted bankruptcy services.
Our advice to anyone who is contacted in such a manner is to break contact with such companies and contact your IVA supervisor straightaway.
If you are concerned about the viability of your IVA then discuss your concerns with your supervisor first and, if after consultation, you decide to declare yourself bankrupt, your supervisor will advise you on where to find assistance for free.