IVA and early termination

pa.nik

Hi everyone,
I tried to find a similar situation but I couldn’t find any.

I started an IVA in May 2020 owing approx £32k to credit cards and the HMRC (Tax Return - Self Employed). My disposable income back then was quite low therefore my monthly payment was £222 which was bearable. 

Then on the next Annual Reviews and due to my significant increases to my salary, my monthly payment reached £475 (still today based on 2022 figures). I sent my IP (CreditFix) my payslips and bank statements and I should be expecting a significant increase on my payments due to my increased salary and therefore my disposable income.

Given that I’m on my 41st month of my IVA and that I have accrued approx. £14k of repayments, can I terminate the IVA early on a “funds paid to date” basis?

I rent, have no car but my disposable income does not qualify for a DRO in my opinion. Are there any other ways to terminate early and save those remaining £9.5k from them?

sourcrates

Unfortunately IVA`s are mis-sold on a massive scale, and its obvious from your post that you were given very little information as to how the arrangement works, and that it was probably wholly unsuitable for your needs in the first place.

However, that ship has sailed now, so in answer to your question, you won`t have 14k in the payment pot, probably not even half that, and you can`t terminate it without approval.

IVA`s do not work on a standard repayment basis, the payments you make have certain cost`s deducted from them first, such as the IP`s fees, likely to be 4/5k, VAT, cost of setting up your arrangement, typically 1/2k, bank charges, any other fees, interest, then, last of all, creditor disbursements, which occur randomly throughout the arrangement.

At this point in time, your creditors will have shared around about 7/8k between them, maybe less, so they are very unlikely to agree a "funds paid to date" settlement.

Of course you can always stop paying, and allow the arrangement to fail, it takes about 6/7 months or so to filter down what's happened, shortly after which normal collection activity will re-start.

But you have come this far, you may as well complete it now.