Cancelling iva or not?

Gowland100

Hello Im just after some opinions and advice, basically I started an iva in April of last year without really thinking about any of the inconveniences I was going to be left with in the future. I'll cut straight to the chase but I have been offered a job where my income is going to be significantly increased, I am in in position where I think I would be better off paying my creditors off directly and this way I would be able to build up a better credit rating over the 4 years I would of been in a iva. My question is, is it possible to cancel my iva and pay off my creditors directly or would it be worth just continuing the iva as its going? Thankyou Scott

foxy-stoat

If you have already started your IVA then you are in a legally binding contract, any changes in your circumstances will need to be disclosed to your IP, I would save 50% of the additional income you will now receive as they will certainly ask for this now or at your anual renewal.

You can stop paying the IVA for 3+ months but you will run the risk of the IP partitioning you for bankruptcy.

Speak to your IP, there may be a clause for you but I doubt it, you will need to understand all finanicalimplications if you do manage to end it early. You may be better off just paying it to the end.

DorisTrousers

Pros of cancelling:

You may be able to make reasonable repayment offers to your creditors which give you more of "a life". They are very likely to want a financial statement and possibly proof of your new circumstances though

Cons of cancelling:

IVA fees are very front loaded, you will find that you have not paid off very much, if anything

The IP could indeed bankrupt you

Creditors could add interest lost, and interest going forward, especially if you exceed contractual minimums on balances outstanding

The IVA, and any previous default notices, will still show on your credit file anyway, so little real difference there

Under the terms of a protocol compliant IVA, whilst your monthly payment would undoubtedly increase, it will not go up until annual review time and shouldn't be backdated either. Even then, the difference is split 50/50. E.G, your payment is now £200, but after a pay rise you can afford £1,000. Your payment should go to £600. They get more, you keep more. If increased payments mean that the IVA finishes early, great, but if not you still have all the advantages such as interest freeze in the meantime.

Think very carefully would be my advice on this.