How flexible is an IVA?

When you start an IVA, your Insolvency Practitioner will help you to figure out how much you can afford to pay. You must show that you can commit to these payments for five years - however, it's possible that something unexpected will change in that time, which could make it hard to stick to them.

So what happens if your circumstances change during your IVA?

You might be able to take a 'payment break'

If these changes to your circumstances are only temporary - say you've had an unexpected bill for car repairs - you can ask for a payment break. This is only suitable if you only want to miss a few payments, and will be able to resume making payments afterwards.

Some kind of allowance for small payment breaks like these is often written into the terms of an IVA.

Click here to find out how your Insolvency Practice guides you through your IVA.

You can ask for an IVA variation

If your financial situation changes quite dramatically and you're left struggling with your payments, a payment break might not be suitable. Say, for example, you've suffered a pay cut or your expenditure has increased.

In this case, it may be best to ask for an IVA variation. Remember that it's important that you inform your Insolvency Practitioner of any changes to your financial circumstances as soon as you can.

An IVA variation is a legal adjustment to the terms of your IVA, which could bring your payments down to a level that you can afford. Your IVA variation would have to approved by your lenders in the same way as your original IVA agreement - i.e. 75% of voting lenders by debt value would have to agree to it.

If you'd like advice on your IVA or IVA variations, click here to contact us.

What happens if my IVA variation is rejected?

If your IVA variation is rejected by your lenders, you may have to consider a different debt solution. Contact us, and an expert will talk to you about your best course of action.

What happens if my financial situation improves?

IVA payments can go up as well as down. If you get a pay rise or an unexpected windfall, your IVA payments will probably be increased so you can repay more of the money you owe.

If you've been considering an IVA, you can click here to apply. One of our expert advisers will ring you back to talk about your situation and discuss the best way forward.

By Helen Gradwell.