Worried about growing debt?
Contact one of our trusted debt management partners for free today and take back control of your finances

Last updated: 14/11/2023 | Estimated Reading Time: 3 minutes

Failing on your IVA

In spite of often being the best way out of financial difficulties for some people, IVAs do come with a number of risks and are no way of guaranteeing a resolution to your debt.

Individual voluntary arrangements are often seen as appealing because they allow you to extend the term of your loan and also reduce the size of each of the monthly repayments. They also allow you to deal with your creditors collectively, through an insolvency practitioner, as opposed to having to work out payments for them one at a time.

This guide will talk you through the necessary steps to take if you find yourself unable to meet the new monthly payments set up by your insolvency practitioner.

In This Guide:

Struggling to make repayments

It is important that you let your insolvency practitioner know as soon as possible if you find that you are struggling to make repayments on your IVA. If you don't do this you will be at risk of your IVA falling through altogether. If you do let them know straight away, they may be able to reach a new agreement with your creditors that lowers your monthly repayments temporarily.

Not making your IVA repayments

If you find yourself in the position where you are unable to make any repayments at all and your lenders cannot be persuaded to let you lower your repayments further, it is likely that your IVA will be terminated altogether. Once your IVA collapses, you will still owe any outstanding money back to your lenders and they will now be free to pursue you through the courts. It is likely that they will individually open bankruptcy proceedings against you.

It is worth noting that you will also need to pay your insolvency practitioner back for all the work they have done for you up until the collapse of your IVA.


Due to the fact that you have not met the terms of your IVA and you have allowed it to collapse, your lenders will be legally allowed to make direct contact with the courts - without notifying you first. Your insolvency practitioner may also ask the courts to start bankruptcy actions against you.

Although this all may sound catastrophic and is definitely not an ideal situation to be in to say the least, if you are someone who has a low income and few assets, this may actually be the best option available to you. In spite of this there are a number of dangers and risks associated with declaring bankruptcy. Before you choose this route you should attempt to communicate directly with each of your lenders and try and renegotiate a new arrangement with them individually.

Alternative debt solutions

It is also worth bearing in mind that you may not have been well suited to an IVA anyway. If this was the case, you might want to look into alternative debt solutions and see if any of them are a better fit to your circumstances.