Legally Cancel My Individual Voluntary Arrangement (IVA) In 3 Steps
If you signed an individual voluntary arrangement (IVA) to avoid bankruptcy you are not alone. How is that working out for you? If you are having trouble meeting payments, you could talk with your insolvency practitioner to see if different arrangements can be made. Or maybe you would like to cancel your IVA altogether.
Can you legally cancel your IVA? Yes, you can, although it will not make your debt go away and you could face bankruptcy again. Just stopping payments will not take care of your financial difficulties either.
Enlist the help of DoNotPay to legally cancel your IVA for you and seek advice on how to rework your finances.
What Will Happen If You Do Not Pay Your IVA?
If you have missed a payment or cannot make payments at all, you should reach out to your insolvency practitioner, according to Citizens Advice. If they cannot reach an agreement on a lower payment schedule, your IVA will fail. This could mean bankruptcy.
Some creditors may offer you a statutory demand warning, but it is not necessary if your IVA has already failed.
Bankruptcy is not necessarily a bad thing. If you do not own a home or an expensive car, and you are low income, it could be the best thing for you to do.
But, before allowing yourself to go bankrupt or declare bankruptcy, you need to take into consideration:
- What debits are covered under bankruptcy?
- How could bankruptcy affect your bills, home, car, and other belongings?
- How much will you have to pay to file?
- If you are an immigrant, what is your immigration status?
Bankruptcy takes about a year. During that time, the creditors involved will not be allowed to contact you or take you to court. Your insolvency practitioner may recommend bankruptcy if there are enough funds in your IVA. However, you will still owe them their fees.
There are other potential debt solutions. Citizens Advice suggests you discuss your options with a debt management plan provider.
How to Legally Cancel an IVA by Yourself
Send a letter or email to your insolvency practitioner. They and your creditors must be willing to accept your cancellation. Some reasons they may agree include:
- You may be able to make higher repayments than you are through the IVA
- You will not be able to pay any more of your IVA due to reasons such as illness, or homelessness
If they agree, your insolvency practitioner may cancel the IVA. If they do not agree and you stop making payments, you will breach the IVA terms and conditions. As a result, your IVA will fail.
If your IVA fails, you will need to:
- Pay your insolvency practitioner fees anyway
- Work with your creditors to resolve your debts, which could start accruing interest
What If Your Insolvency Practitioner or a Debt Collector Has Pressured You or Violated Your Rights?
You have every right to file a complaint if you feel an insolvency practitioner or debt management company has pressured or misled you.
Filing a Complaint About an Insolvency Practitioner
If you feel your insolvency practitioner has not worked toward your best interest, you should first file a formal complaint to them directly. You can do so in writing, by email, or by phone. However, if you call, send a backup letter as well to provide proof of your complaint.
If you are unhappy with the response, you can file a subsequent complaint to the Insolvency Service at GOV.UK. They will look at your complaint and forward it to your IP's organisation.
Taking it a step further, if you still are unhappy with the response to your complaint, you can contact the Insolvency Service enquiry line, open Monday-Friday from 9 a.m. to 5 p.m.
Their contact information is displayed in the table below.
|Telephone Number||0300 678 0015|
|Online Form||General Enquiry Form|
If you call, be sure to write a backup letter. If you use the online form, be sure to make a copy for your records.
Filing a Complaint About a Debt Management Company
First, you should reach out to your insolvency practitioner. It is their job to assure you are not being harassed and that your IVA is being handled properly.
Debt management companies are governed by the Financial Conduct Authority (FCA). They should provide you with the best advice possible for your situation. If a debt management company recommended you get an IVA and you feel you were misled, you need to file a complaint.
Check to see if the debt management company you are dealing with has a complaints procedure. Put it in writing and keep a copy.
You can make a formal complaint to the Financial Ombudsman Service. However, they will check to assure you have followed the former steps in filing first to your insolvency practitioner and then directly to the debt management company.
You can reach the Financial Ombudsman Service helpline at 0300 123 9 123, or visit its website at www.financial-ombudsman.or.uk.
DoNotPay Can Help You Legally Cancel Your IVA
Dealing with financial problems at any time is trying and difficult. DoNotPay can make it much less stressful and take care of your problems quickly.
You just need to answer a few questions:
- Search "debt collection" on DoNotPay.
- Answer a series of questions about the debt collectors, including when you were contacted and how you were contacted, so we can determine if they have violated any debt collection laws.
- Decide which course of action you want to take based on our guidance, such as filing a debt verification request, demanding for the collectors to stop contacting you, or reporting them to a professional trade association.
Bet you didn't think it was going to be that simple to legally cancel an IVA. Not only that, DoNotPay can help you deal with any debt collector, effortlessly!
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We all deal with life's problems from time to time. With DoNotPay, you won't have to waste time or deal with the hassle. The app will:
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And the list goes on and on. Why not take DoNotPay out for a test spin and let DoNotPay legally cancel your IVA for starters? Then see where you go from there!