Cancelling an IVA

If you have an individual voluntary arrangement (IVA) and your circumstances have changed, you might wonder if you can cancel it.

Find out what to do if you’re thinking about cancelling your IVA, including when you can cancel and what happens if you do.

Can I cancel my IVA?

You’re allowed to ask for your IVA to be cancelled at any point – including before it starts – but you’ll need your insolvency practitioner and your creditors to agree to it.

Cancelling your IVA can have serious consequences, so speak to your insolvency practitioner as soon as possible if you’re thinking about it.

Reasons to cancel your IVA

If your circumstances change, an IVA might not be right for you anymore e.g. you might have become seriously ill or had a change in income.

It may be that a different debt solution, e.g. a debt relief order (DRO), is now more suitable for your situation.

Although it might seem like cancelling your IVA is the easiest or only option, you should always speak to your insolvency practitioner first. They may be able to negotiate lower your monthly repayments with your creditors or offer you a payment break. There’s no guarantee this’ll be possible but you should always speak to your insolvency practitioner before making a decision.

What happens if I cancel my IVA?

If you cancel your IVA, your creditors will be told. They’ll be able to resume asking you to repay your debts and can also add backdated interest and charges to anything you owe.

Cancelling your IVA won’t remove it from your any earlier. An IVA will drop off your credit file six years from the date it’s agreed.

Your insolvency practitioner will tell the Insolvency Service your IVA has ended. It will be marked as failed on the Individual Insolvency Register. The record will be removed three months after your IVA has ended.

You’ll still have to pay your insolvency practitioner the IVA fees for the work they’ve done so far.

You might need to wait if you plan to apply for a DRO. You’ll need to wait for your IVA to be removed from the register before you’re eligible to apply for a DRO.

You could be made bankrupt. Your creditors may try to make you bankrupt, or it might be the only debt solution left if your IVA fails. Find out about the differences between an IVA and bankruptcy.

How do I cancel my IVA?

You’ll need to ask your insolvency practitioner in writing (letter or email) and ask them to cancel your IVA.

You’re allowed to ask for your IVA to be cancelled at any point but you’ll need your insolvency practitioner and creditors to agree to it.

They’re more likely to agree if you can prove you can repay more money without the IVA, or if your circumstances mean it’s unlikely you’ll be able to keep up with payments.

If they agree to cancel your IVA, your insolvency practitioner will bring it to an end. This is known as ‘failing’ and means the IVA didn’t work.

If they don’t agree, you could stop your payments. This’ll breach your IVA’s terms and conditions, which will also cause it to fail. This can take a long time and could cause delays in arranging a new solution.

Your insolvency practitioner will send you a letter confirming the end of your IVA.

You’ll need to contact your creditors immediately, so they know you plan to find another solution for your debt. If you don’t, they may apply to make you bankrupt.

Look at other debt solutions

You might still be able to enter another debt solution, e.g. a debt management plan (DMP), if you decide to cancel your IVA. Some solutions are free and there’s a fee for others.

Free debt advice could help you decide if another solution could work for you. You can access it online 24/7 or call us during our office hours on 0161 518 8285.