Last updated: 14/11/2023 | Estimated Reading Time: 2 minutes

Missing an IVA payment

There can be some quite serious consequences to missing your IVA (Individual Voluntary Arrangement) payments and if you don't seek to rectify it correctly, you may find that your agreement becomes void. For this reason it is extremely important to know what you should do if you find yourself falling behind on your payments, if you want to continue with your IVA.

In This Guide:

• What to do if you miss an IVA payment
• Receiving a notice of breach
• Failing to make payment

What to do if you miss an IVA payment

One the most important things to do if you don't make your IVA payment on the day that is set out by your agreement, is to take positive action to contact your insolvency practitioner. It is important to do this as soon as possible so that you can let them know your reasons for failing to make the payment on time. Once you contact them you should enquire about whether or not it is possible to make the payment at a later date.

Your insolvency practitioner (IP) is not compelled to allow you to make a late payment but there is a chance that they will if you supply them with a valid reason. Some examples of valid reasons may include having issues with your bank or receiving your pay cheque late from your employer. If you do this swiftly with a good explanation, they may let you make your payment later.

Receiving a notice of breach

It is fairly likely that your IP will send you a formal notice of breach at some point after you fail to make a repayment. This form of documentation will ask that you supply a formal reason as to why you failed to meet the payment terms that you agreed upon. Typically an Individual Voluntary Agreement will allow you a maximum of three months to respond to the notice of breach. If you fail to make your response within this time, you could face some severe consequences such as the cancellation of your IVA.

Failing to make payment

In the event that you do not respond to your notice of breach within the three months allowed and you fail to catch up on your repayment, you could find that your IP provides you with a certificate of termination. In the worst case scenario your IP might begin court proceedings to declare you bankrupt. The best case scenario is that your IP allows you to modify the terms of your agreement. They may let you lower your monthly payments if you can show them that your financial strength has grown considerably weaker since you started the IVA.