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i England, Wales, and Northern Ireland

Managing an IVA

Can an individual voluntary arrangement (IVA) fail?

An IVA is a legally binding agreement between you and your creditors. It helps you pay off your debts at an affordable rate.

This means:

  • The people you owe must abide by the rules
  • You must do what you agree to

Your IVA can fail if you do not follow the rules set out in your IVA proposal.

IVAs are arranged by StepChange Voluntary Arrangements, part of StepChange Debt Charity. In Scotland, a protected trust deed is a similar solution. This has different benefits, risks and fees.

How to find out if an IVA is right for you?

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What is an IVA breach?

You get a "breach notice" if you break the terms of your proposal.

This tells you:

  • How you broke the terms and
  • What you can do to put it right

A breach notice can be issued for things like:

  • Missing payments
  • Falling three months behind on payments
  • Not doing something your IVA Supervisor asks you to do 
  • For example, not selling an asset you agreed to sell
  • Not paying in a percentage of additional income you earn
  • Not paying in the money you make from selling assets
  • Borrowing more than £500 without the Supervisor's permission
  • This includes borrowing money from family or friends
  • Not giving information for your annual review
  • Not declaring windfalls to the Supervisor
  • Things like inheritances, compensation pay-outs, or lottery wins

What happens if I breach my IVA?

Your breach notice tells you:

  • What the problem is
  • How long you have to fix it

Your Supervisor arranges a meeting of creditors if you do not fix the breach.

The people you owe can cancel your IVA at this meeting.

There are things you can do to get your IVA back on track, like:

  • Provide the information needed for your annual review, or
  • Pay in additional income

You may find your circumstances change and you cannot do these.

In this case, your Supervisor can ask your creditors to:

  • Vary the terms of your IVA, and
  • Accept a change to what they originally agreed

You may break the terms of your IVA if:

  • Your circumstances change for the worse
  • Your income increases and you do not declare it

You must tell your IVA Supervisor about any changes, good or bad.

Ask your supervisor if you do not know whether something is a breach.

Can I choose to end my IVA?

Yes. You can ask your Supervisor to end your IVA in writing.

Please be aware that if you do this, your creditors can:

  • Add backdated interest
  • Add backdated charges

You need to pay these in addition to your outstanding balance.

The date your IVA was processed remains on your credit file for six years.

It can take several months for your name to be taken off the IVA register.

Clare Lindley and James O'Carroll of StepChange Voluntary Arrangements are licensed to act as insolvency practitioners in the UK by the Insolvency Practitioners Association.

How can I keep my IVA on track?

Your Supervisor can help you keep things on track if your circumstances change.

For example, you may be able to take a payment break to help cover short term emergency costs.

Your supervisor may need to contact the people you owe if you have more than one long-term change. They can try to arrange a variation of your IVA.

Your IVA Supervisor will:

  • Deal fairly with any changes to your circumstances
  • Decide what action needs to be taken

The sooner you talk to them about any issues, the sooner they can help.

Your Supervisor will send you a certificate of termination if all other options fail. This means your IVA has ended.

When your IVA is terminated:

  • You are no longer protected from collections action
  • You still owe the outstanding balance of your debts
  • Interest and charges can start again
  • The people you owe could petition to make you bankrupt

Sometimes, what you pay towards your debts is less than what you pay into your IVA. This is because of:

  • Nominee fees and
  • Supervisor fees

Find out more about IVA costs and fees.

Get help now

Use our free online advice tool to see what your options are.

StepChange Voluntary Arrangements can help you set up an IVA if that is the best choice for you

Talk to your IP first if you already have an IVA.

StepChange Voluntary Arrangements is a registered trading name of Consumer Credit Counselling Service Voluntary Arrangements Limited, a wholly owned subsidiary of StepChange Debt Charity.