What Happens if You Fail to Comply with the Terms of an IVA?

You should talk to your insolvency practitioner immediately if you cannot keep up with your IVA payments. Explain your financial difficulties to your insolvency professional so that they can allow you to:


  • Paying later than usual
  • You can pay a reduced amount for a limited period or the duration of your IVA.
  • Enjoy zero interest for a limited time
  • Quick IVA resolution

In most IVAs, you have up to a month from the date of the notice of breach to issue a response. Your insolvency practitioner will stop pursuing further action against you if you answer promptly and agree on a plan to settle any overdue amounts.

Your IVA could be terminated if you don’t contact your insolvency practitioner. They could even drive you to bankruptcy.

If you get late on your payments, your insolvency practitioner can send you a letter indicating that you have breached the terms and conditions. They will request an explanation as well as a plan for making corrections. It is necessary to make an emergency payment to remedy a late payment.

Late Payments

You must contact your IP as soon as possible if you discover that you cannot complete your payment by the specified date. 

Find out regarding the prospect of payment delay. If you can provide your Insolvency Practitioner (IP) with a valid explanation for why you have been paying late, they may be willing to accept it. 

If you do not make the required payment or provide prior notification, your intellectual property will issue a notice of breach. A payment request will be made, and a justification for the delay will also be provided. You must send in this money as quickly as you can. You have up to three months from the day you were notified of the breach to respond to the notification in most IVAs. 

If you pay your IP within the given time frame, they will not take any legal action against you and will end their claim against you. Furthermore, they will be motivated to provide you with IVA debt advice. Your IP may take legal action against you if you fail to make the required payment within three months. After hearing about your financial difficulties, they may amend your IVA to minimise the monthly money you must pay.

What Will Happen if I Fail to Make a Monthly IVA Payment? 

If you need help making your IVA monthly payments regularly or need to catch up on one of your payments, you should contact your IP as soon as possible. 

Your IVA will eventually fail if you don’t tell your IP about your financial difficulties and keep missing payments. Talk to your IP if you’re having temporary money problems; they may be able to work something out so that you don’t have to make payments right now.

Your car breaking down, monthly income dropping, etc., all qualify as emergencies. Ensure you know that your IVA must have been created per the IVA protocol to be eligible for a payment moratorium.

If your financial situation changes after entering into an IVA, you should review the conditions of the IVA to see if they permit you to reduce your payments. Talk to your IP if you’re having temporary money problems; they may be able to work something out so that you don’t have to make payments right now.

It is important to remember that if you are having problems making your IVA payments to your IP, you must produce evidence and documentation of the problem. They will only be receptive to aiding you if you do it. 

Please be aware that the length of your IVA will increase proportionately to the length of any payment suspension. 

This is to make up for the payments you won’t make while on your payment holiday. When the IVA is filed will determine how long you are given to make up missed payments.  Your IP could cut the frequency of your IVA monthly payments by as much as 15% without getting approval from your creditors if your IVA was set up using the IVA protocol. 

Your IP will need approval from your creditors if you want a reduction in payments of more than 15%. Costs could be involved, and your debtors might not even be on board. Your IVA will only succeed if your creditors reduce your payments and you have no other means of meeting them. In this instance, you’ll need to locate a replacement debtor. 

If your IVA needs to be established through the process, you should review the papers to see if you can adjust your payments in the event of a change in your financial situationIf that’s the case, you can consult your IP about it, and they can likely work out a payment plan with your creditors. Your IVA will only succeed if it includes such a provision and you cannot maintain the required monthly payments.