Most IVA companies require at least 5 – 6 months of missed payments to terminate the contract they have with you and the creditors. An Insolvency Practitioner is likely to lose money if you leave the IVA, so they will try to ‘re-sell’ you back into the IVA.
For those wishing to exit an IVA it is necessary to stop all payments immediately. After three missed payments you will receive a letter of default and if this is ignored, an IVA company will approach the creditors with a view to terminating the agreement.
IVAs are intended to protect assets such as homes and businesses, but for those persons living in rented and holding down everyday jobs, they are both expensive and unnecessary. If you have debts totaling more than £15,000, bankruptcy is a much better solution. You will be ‘in and out’ of bankruptcy in 12 months and completely debt free.
Key Points for leaving an IVA:
- Stop making the IVA payments immediately. If you don’t have the confidence to do this or feel intimidated by the company in question, we will write to the company and advise that you will be exiting the IVA.
- There are no repercussions for stopping payments – you have the right to leave an IVA just as you had the right to enter into it in the first place. It will not result in Bailiff visiting you for payment.
- Once you have missed three payments you will receive a letter of default and if this is ignored, the IVA company will approach the creditors with a view to terminating the agreement.
- The actual termination takes place roughly two months after the default. You will receive a letter to this effect, which might be asked for once bankrupt.
- Ironically, despite going through the process of leaving the IVA, it will continue to protect you from your creditors until such time as the IVA is terminated.
- However, this will not be the case once the IVA is terminated and unless an alternate course of action is taken – such as bankruptcy – you will be contacted again by your creditors and debt collectors.
Feel free to call us for a confidential chat about your circumstances on 01425 600129 and we will talk you through your options. We offer an a – z service, including the completion of the all-important income and expenditure, and submitting the application online.