Ending IVA

Tenerife0308

Hello,

I have been on the phone to citizens advice this morning who feel that I was miss sold my IVA in October 2023. I am no longer able to meet the payments they require and will be terminating my IVA to go ahead with Bankruptcy. If I was to contact my IVA supervisor to terminate would they still want payment at the end of this month? also because my IVA hasn’t been set up long would I be required to pay any fees for terminating/fees it costs to set up the IVA in the first place? I have an appointment with Citizens Advice next month to go over bankruptcy in more detail but it’s something I’ll be going ahead with. 

sourcrates

The only way you can terminate an IVA early, other than by paying it off, is by non payment, so making any further payments to it will just delay the process even longer.

It can take the better part of a year before your arrangement will officially be ended, so there is no rush to bankruptcy. Until it terminates, you are still legally protected from further action by your creditors, I don`t know what advice you are looking from from CAB but we have a fairly knowledgeable bunch on here who may be able to answer your questions.

I assume you are not a homeowner, as you are considering bankruptcy, so it does suggest the IVA was not appropriate for your needs, given they are specifically meant to protect assets such as a house.

You are not that far into the IVA, so there may be fee`s to pay, but your payments to date might cover those.

Tenerife0308

Thanks for your response.

am I best to terminate it myself (send them termination in writing) or just let the payment bounce and wait to hear from them? I didn’t realise it would take so long for it to actually terminate. Im hoping I can put some money aside to pay for the bankruptcy as for IVA fees which il probably have to pay I wonder if these could be included in the actual bankruptcy? 

have no assets hence bankruptcy is the better option for me. How does it go if one of my creditors make me bankrupt? I owe £18,000 to one of them! 

sourcrates

Sorry, you mis-understand insolvency laws, you can`t terminate an IVA yourself, only the IP can do that, the process starts with you withholding payment on a permanent basis, that is all it takes, once you do that, it can take a long time for it to be formally declared failed.

Its extremely rare for a creditor to make an individual bankrupt, unless they have significant assets to realise, otherwise what`s the point of them forking out £1000`s of pounds and getting absolutely nothing in return, won`t happen, unless its a tax debt and HMRC are chasing you, otherwise forget that scenario, but it would save you the £680 fee.

Tenerife0308

Thanks for confirming, il withhold payment then and look into bankruptcy once the IVA has failed.

fatbelly

I would say it will take 6-12 months. Plenty of time to save the £680.

In these scenarios IPs don't pursue loss of fees.

Tenerife0308

Hi, so the IP has contacted me this morning and said they require an email from me confirming termination - I asked how long this usually takes and they said maximum is 30 days then creditors are able to contact me? that’s not very long at all to find the funds for bankruptcy🤦🏻‍♀️

fatbelly

Nothing's going to happen for months even if this IP is quicker than all the others

Tenerife0308

Thanks so much for the reassurance!🙌🏼