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How can you Fail an IVA ?

When you agree to the terms of an Individual Voluntary Arrangement (IVA) it is important that you make your repayments as stated. If for some reason you do not do this then you will be sent notice of your breach and if you still do not make payments you will ultimately fail your IVA.

Setting up an IVA

When an IVA begins, it must provide your creditors with more then they would get should you be declared as bankrupt. If this will not be the case then your IVA will not be accepted by your creditors and you will have to investigate other avenues.

It is important that when you are setting up your IVA that you make sure you declare all of your earnings and any other forms of income. If you are found to have not done this, then again, your IVA will likely be declared as failing.

Once you have successfully managed to set up your IVA with your Insolvency Practitioner (IP) then it is vital you set your budget realistically. This is one of the main reasons an IVA will fail as you will be unable to meet your repayments and therefore break the terms. Should this occur it is important that you contact your IP immediately.

What happens if you do not keep to the agreed terms?

Failure to keep to the terms set out in your IVA means that you will be issued with a Notice of Breach. This notice will be sent just to you and will give the details of the breach that has been made.

Once given the Notice of Breach you will be given approximately one month to rectify the situation and let them know why the problem occurred. If you do this then you should be able to carry on with the IVA and sometimes rearrange the terms.

However if you do not rectify this notice then your IVA will fail. Your IP would then most likely give you a Certificate of Termination and may present a petition for your bankruptcy.

Why would my IVA fail?

The main reason an IVA fails is through lack of money. This may be because you were trying to survive on too little and could not manage or it may be that you simply do not have enough funds. Whatever the problem is you should contact your IP immediately and inform them.