What Happens to my IVA if I Lose My Job? 

If you’re worried about what happens to your IVA if you lose your job, you’re in the right place. Every month, our website guides over 170,000 people like you through their debt solutions. We know that the IVA process can be quite puzzling, and it’s normal to worry about paying off a debt.

In this easy-to-understand article, we’ll explain:

• What an IVA is and how it works.
• The steps to take if you lose your job during an IVA.
• How IVA repayments work and how long an IVA lasts.
• The potential to write off some debt.
• The obligations when an IVA is in place.

Our team is made up of people who have faced debt themselves. We understand your worries and are here to help. This article will help you feel more confident about your IVA and what to do if your job situation changes. You’re not alone in this journey.

Let’s dive in.

What happens to my IVA if I lose my job?

You could lose your job at any point during an IVA. Sadly, it happens and if it does, you should tell your insolvency practitioner straight away.

A practitioner could allow you a ‘payment break’ which could last for 3 months. Moreover, this can be done without the creditor’s consent.

You could use the time to find a new job before having to make any repayments on your IVA.

Also worth noting is that your agreement could be covered for emergencies. This includes losing your job or being made redundant during an IVA.

Lots of people ask this question because it’s a real concern. Check out the message someone posted on a popular forum:

Source: Moneysavingexpert

Don’t worry, here’s what to do!

There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out. 

Fill out the 5 step form to find out more.

What are your obligations when an IVA is in place?

You’re obliged to abide by the terms of an IVA for its duration. Moreover, you must:

• Ensure you can make the agreed monthly instalments or a lump sum to settle the debt
• Inform an IVA provider when your income goes up or you receive money from elsewhere
• Not take out further loans or credit without first asking permission to do so

What happens when you miss an IVA payment?

Your insolvency practitioner may send you a ‘notice of breach’ if you miss a scheduled IVA payment.

You must respond to the notice and let the practitioner know why you missed the payment. You should try to make a payment as soon as you can to put things right.

It’s worth noting that with most IVAs, you’re given one month to respond to a notice of breach.

What happens when you default on an IVA?

When you don’t meet payment obligations during an IVA, and creditors won’t agree to lower payments, the IVA might fail. The same is true if creditors don’t agree to you settling an IVA early!

You’d be sent a “certificate of termination” which in effect ends your IVA.

You’ll go back to square one and your creditors could take you to court to recover what you owe them.

Plus, you’d be obligated to pay your insolvency practitioner’s fees for work they did right up to date the IVA failed.

Can an insolvency practitioner make you bankrupt?

Yes. An insolvency practitioner could make you bankrupt when you don’t have enough money in your IVA.

Moreover, creditors could start legal proceedings against you individually to make you bankrupt!

You may want to discuss your situation with a debt expert to see if filing for bankruptcy is the best route to take.

Can you avoid bankruptcy if an IVA fails?

You may be able to avoid being made bankrupt if your IVA fails. For example, you could contact your creditor and ask if they’d be willing to:

• Agree to a payment plan to repay what’s owed to them
• Pause starting legal proceedings while you research your options

However, you should seek advice if your creditors aren’t willing to do either of the above and insist on going down the bankruptcy route.