If you are currently in an Individual Voluntary Arrangement (IVA) and find that you are unable to continue with the agreement, it is possible to terminate the IVA. However, it is important to understand the consequences of terminating the agreement before you proceed.
An IVA is a legally binding agreement between a debtor and their creditors. It is designed to help individuals who are struggling to repay their debts by establishing a realistic repayment plan. The IVA is typically supervised by an insolvency practitioner who ensures that the terms of the agreement are met by both parties.
Terminating an IVA can have serious consequences and should only be done after careful consideration. Here are some of the things you need to know before deciding to terminate your IVA.
1. Understand the implications of terminating the IVA
Terminating an IVA means that you will no longer be protected from your creditors, and they may take legal action against you to recover their debts. This could include bankruptcy or debt collection proceedings, which can have serious implications for your financial future.
2. Consider why you want to terminate the IVA
Before you decide to terminate the IVA, it is essential to understand why you are struggling to keep up with the payments. If your financial situation has changed, it may be possible to renegotiate the terms of the agreement with your creditors. If you are experiencing financial hardship, you may be able to apply for a Payment Break or a Modification Order to help you stay on track with your payments.
3. Seek professional advice
If you are considering terminating your IVA, it is essential to seek professional advice from an insolvency practitioner or debt advisor. They will be able to provide guidance on the best course of action and help you understand the consequences of terminating the agreement.
4. Notify your insolvency practitioner
If you have decided to terminate your IVA, you will need to notify your insolvency practitioner. They will then inform your creditors, and the agreement will be terminated. It is important to note that you will still be liable for any outstanding debts, and your creditors may take legal action to recover their money.
In conclusion, terminating an IVA is a serious decision that should only be made after careful consideration. If you are struggling to keep up with the payments, it is advisable to seek professional advice and explore all available options before deciding to terminate the agreement. Remember, terminating an IVA can have serious consequences, and it is vital to understand the implications before proceeding.