Can I cancel my IVA once it's agreed? IVA Issue
Summary: Can I cancel my IVA once it's agreed? - This article highlights reasons for cancelling existing IVA's (Individual Voluntary Arrangement) and the consequences.
Ideally you should not cancel an IVA once it is set up. It is in no-one's interests (least of all yours) for this to happen. However sometimes changes of circumstances make the sustainability of an IVA impossible. Changes should always be discussed with your Insolvency Practitioner. It may be that a payment break could be arranged to allow time (e.g. finding a new job after redundancy). All options will be considered - lump sum settlement (maybe utilising a redundancy settlement), reduced payments (perhaps extending the length of the IVA).
Failure of my IVA due to high repayments
A lot of people cancel their IVA because of excessive charges, unrealistic levels of set repayments and being pressured into IVAs. In many cases IVA failure is due to the debtor stopping monthly repayments sometimes because an IVA insolvency practitioner insists clients pay unrealistic IVA payments. Communication and discussion are vital to establish appropriate repayment levels. IVA clients are expected to make sacrifices but do have to be able to live properly.
A Notice of Breach will be issued if the IVA falls into arrears. This allows 30 days for the problem to be rectified.
No easy options
It may be that we're simply finding the restrictions of an IVA too challenging and we crave a new car or a holiday or a quick fix solution. However beware of easy answers. We may hear an example of people going for bankruptcy and never looking back - but every case is different. It may be that for us, the Official Receiver will insist on a payment order being issued resulting in 3 years of payments of a greater amount than our IVA payment level. Take professional advice before making hasty decisions.
Following an IVA failure
If you cancel your IVA then you will receive a certificate of default and failure. Your creditors will be informed of the IVA failing. It won't be long before creditors will want to know what you propose to do about the outstanding debt. The most likely next step is to look to bankruptcy to solve the debt problem. However it may be possible to come to an arrangement with creditors informally or to make use of a Debt Management Plan, to make some repayment on the debt. This may be appropriate if we believe our financial circumstances may improve in the foreseeable future.