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Managing an IVA

Can I pay my IVA off early?

Should you receive a windfall or lump sum during your individual voluntary arrangement (IVA), you might wonder if you can pay it off earlier than planned.

You can do this but there are some things you need to consider. You must remember that any windfalls or inheritance that you receive would be considered an asset in your IVA. You must let the Supervisor IVA know about any assets as soon as possible.

Sometimes a third party - such as a family member or friend - may offer to pay your IVA off via a ‘gift’ of money. Your creditors may find this appealing, as it’s not considered an asset in your IVA and may allow you to settle your IVA early. 

Should a third party offer to pay off your IVA, they'll need to provide information such as their ID. They also need to confirm that they understand how the funds will be used. 

In both scenarios, we would need to confirm the source of the funds. This is a regulatory requirement, as we must ensure that the funds haven’t come about due to money laundering or other illegal activities.

IVAs are arranged by StepChange Voluntary Arrangements, part of StepChange Debt Charity.

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How do I pay my IVA off early?

Your Insolvency Practitioner (IP) can talk you through how you can make a lump sum offer to your creditors. If they think your offer is reasonable and likely to be accepted, they’ll arrange a variation meeting with your creditors

If your IP doesn’t think the offer’s reasonable, they’ll tell you why and look at alternative options for you, particularly if the funds received would already be considered an asset of the arrangement like windfalls or inheritance. 

When making the offer, you’ll ask your creditors to agree that when the lump sum is paid, you won’t need to make any more monthly payments. Again, your IP can advise further. Should your creditors agree to the lump sum payment, the IVA will be closed down once the payment is made.

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.

What happens after I’ve paid off my IVA?

If you pay off your IVA early, you can get a head start on rebuilding your credit rating. However, the IVA will still stay on your credit report for six years from the date that it was approved. It may still affect your ability to get credit, too. For example, you probably won’t qualify for a mortgage or other large-scale credit product while the IVA is still on your credit file.

Can you help me pay off my IVA?

If you find that your monthly income has increased significantly or you receive a windfall or inheritance, you must let your IP know. They’ll review your circumstances and confirm what needs to be paid into your IVA.

If this means you could pay off the outstanding debt included in the IVA in full plus the costs of the arrangement, you may find that you’re able to pay off your IVA earlier than expected.

Read more guides to managing your IVA.

Considering an IVA? Get free debt advice.

If you’re considering an IVA, it’s important to get free and impartial debt advice first. You can only get an IVA with the help of an insolvency practitioner. StepChange is an approved organisation to manage IVAs.

Fees are detailed in your IVA proposal, which an IP will assist in drafting. Any fees have to be approved by creditors. Your IP will explain what fees you need to pay for your IVA.

They aren't available if you live in Scotland. In Scotland, a protected trust deed is a similar solution, but has different benefits, risks and fees associated with it.

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