What Happens if I Stop Paying My IVA
IVA stands for Individual Voluntary Arrangement. It is a resolution between a debtor and their creditors to pay what is owed over a set period of time. In short, an IVA is a court-ordered payment plan for amassed debts. These are debts that are acknowledged as valid and legal and must now, by court order, be repaid. If you are sued by your creditors, the court may place your debts in an IVA, so that repayment is assured and collection actions are not necessary.
However, if you are still struggling financially and cannot meet IVA payment requirements, this can cause further problems. If you’re in that difficult financial situation, you may have asked yourself “”? Here's how it will work out. DoNotPay has a less frustrating way to solve your problems.
How an IVA Protects You From Creditors
An IVA is designed to protect the debtor from debt collection methods. Your creditors are assured by the court that there's no need to call you every day with threatening messages because the money will be paid, eventually. This prevents creditors and debt collectors who buy your debt from taking legal action on collections.
Whilst within the IVA program being managed by your IP (Insolvency Practitioner), you should be protected from debt collection attempts and from further lawsuits to collect the money.
What Happens When You Miss an IVA Payment
So, what happens if you miss just one IVA payment?
- You will receive a Notice of Breach.
- You will have 3 months to catch up on payments.
If you call ahead, you can sometimes get a one-time acceptance of the late payment. But if you don't call, you will soon get a Notice of Breach asking for a good reason, and proof of the good reason. You will then have three months to pay the missing amount and/or catch up and get back on time with the payment plan.
How to Adjust Your IVA for Further Hardship
If you are unable to continue paying your IVA at the current rate, let your IP know. Talk to your IP about your hardship and your plan with good reason and proof. This will slow your repayment completion but make payments easier to keep up with on a monthly basis.
In some cases, you may be able to request a temporary payment break to deal with a temporary hardship. These will most likely be with the option to split the time based on when and for how long you need a payment break. To be granted a reduction or a break, you will need proof of the hardship.
- Lower the IVA required payments: up to 15%
- Payment breaks: 6 months or 9 months
What Happens if You Stop Paying Your IVA Entirely
If you completely fail to pay your IVA, stop making payments, and do not arrange for a break or reduction - you are effectively ending your IVA arrangement. You will first receive a Notice of Breach. If you do not pay or respond within 3 months, you will then receive an IVA Termination Certificate.
This lets you know that the IVA is closed and you are no longer under debt repayment protection. You will receive information regarding how much debt you paid and how much is left to pay to your various creditors.
Unfortunately, from this point, your creditors are once again permitted to engage in debt collection activities and lawsuits.
Alternatives to IVA Debt Resolution - Before the Creditors Get You
What can you do if you must default on your IVA and cannot pay your creditors? Seek alternative solutions before your creditors do their best to bankrupt you. You may find debt charities, debt assistance organizations, and even alternative repayment plans available - but without the help of the court this time.
DoNotPay can also help you take action against your creditors themselves if they violate the harassment laws in their efforts to reclaim your debt.
Get Debt Help With DoNotPay!
? You have to face debt collection all over again.
DoNotPay is here to protect your right to peaceful living and debt resolution. If you must default on your IVA, we can help you reduce the impact of debt collection activities resuming on the part of your creditors. Debt collection agencies often cross the line. DoNotPay will help you stand firm against creditors, seek resolutions to your financial problems, and help you report violations or file complaints against harassing debt collections.
Simply tell us what has happened regarding your debt and creditors and we'll help you figure out the rest.
How to Get Started
- 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.
And that's it! Once you choose the course of action you want to take, DoNotPay will handle the rest. We'll deliver your request directly to the debt collectors via first-class mail, or file your complaint automatically with the relevant trade association or ombudsman.
Other Ways DoNotPay Can Help With Debt
DoNotPay can also help with other debt collection agencies such as
|Moorcroft Debt Recovery||DWP Debt Management||Lowell Financial Debt|
|Provident Loans Refund||Marston Group Holdings Debt||Amigo Loans Refund|
What Else Can DoNotPay Do?
DoNotPay can help you rebuild your life after a successful or failed IVA. Our many online tools can help you save money in the short term and the long term. We can help you find missing items, wait on hold for you, and clean up your digital accounts. Enjoy free trials without a subscription and dinner reservations without a card on file. DoNotPay is here to make those big and little essential tasks simple. Explore our services to find out more.
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