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IVA Payments | Debt Article

What if you can't make your IVA payments?

When you enter into a voluntary arrangement or IVA with your creditors, you are making a legal agreement to pay a certain amount of money each month to an insolvency practitioner. The money that you pay to your practitioner is then divided between your creditors as agreed. Sometimes, things go wrong. The normal term over which an individual voluntary arrangement lasts is five years, and a lot can happen during that time.

What If You Lose Your Job

The current economic situation in the UK means that an increasing number of people no longer have job security. If you have an IVA in place and you suddenly find that your job is on the line what do you do? As soon as you know that there is going to be a downturn in your financial circumstances you should inform your insolvency practitioner. Although you have a legal duty to pay your creditors the agreed amount of money each month, if you don’t have the money coming in, then you cannot pay it. The key to dealing with a situation where you have legally agreed to pay your creditors is to make them aware of the situation immediately.

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If you lose your job and know that you won’t be able to meet your agreed payments then you should get in touch with your insolvency practitioner straight away. Once your practitioner knows what is going on they can then inform your creditors and ask for a payment break until your circumstances change. Most creditors will be amenable to waiting for a while, and so the practitioner can arrange for you to have a short break from payments until your circumstances change. If you fail to notify your insolvency practioner and start missing payments without explanation then you will be deemed to have broken the agreement and you could end up in court.

Keeping Your Practitioner Informed

As long as you let your insolvency practitioner know what is happening and inform them the minute you know that you are going to lose your job, then they can arrange a payment break with your creditors. As soon as you find employment again you are legally bound to inform your practitioner who can then inform your creditors that payment will resume on such and such a date. Losing your job when you have an IVA in place doesn’t have ot be the end of the world. It is possible to get people to agree to a break if they know the reason why, the main criterion if you lose your job when you have an IVA is to let your insolvency practioner know exactly what is going on.