An IVA has a simple definition, it is a legally binding agreement to pay off your debts in the most efficient manner. This also means that your creditors are also bound by similar rules. They need to stick to the IVA terms just as you do. If both of the sides carry forward their part of the deal, IVA will succeed. If you don’t, this can lead to your IVA failing.
IF any of the IVA terms is violated, it won’t fail instantly. Rather, there will be a breach notice issued to you. This notice is the indicator that you are in violation of the terms of contract. It also tells you how you can put it to right.
Following are the things however that could put your IVA in jeopardy.
- Missing payments
- Getting at least three months’ amount overdue
- Not selling an asset you agreed to sell in the IVA
- Not paying the proper percentage of additional income
- Not paying money from assets sales to your creditors
- Borrowing more than £500
- Not providing prudent information
- Not declaring windfalls
What happens next?
Your breach notice will detail all the problems in the IVA compliance failure. It gives you a period to fix things. If nothing changes, the creditors are given the option to terminate your IVA. It is possible to get your IVA back on track by providing the required information or by paying in additional income. It is also possible for your Supervisor to ask your creditors to vary the terms of your IVA according to your needs. Most of this requires the expertise of financial gurus.
Voluntarily Termination of IVA
You can request the IVA Supervisor for termination of your IVA. Put your request in writing. This may result in additional backdated interest and charges to your outstanding balances. It can also take several months for your name to be taken off the IVA register.