Failed IVA - Overview on causes and alternatives

If your IVA becomes inactive for some technical reason, you will be provided with a non-compliance certificate by your IVA supervisor that would indicate the non-functionality of the IVA and the reasons thereof.

There could possibly be not more than three reasons for the fall:

  1. You might have not been able to be regular with your payments as per IVA standards
  2. You have not furnished the requisite information
  3. You have not abided by the general terms of your IVA agreement

The IVA failure can be informed to the IVA Insolvency Practitioner to lobby for debtor's bankruptcy before the applicant gets back to from where he had started.

In such a situation, the debtor may like to consider alternate options such as a Debt Management Plan (if allowed), which is an informal arrangement with the creditors or can also wait for some period until the right time comes to reapply for an IVA.

In the event of the failure of an IVA, the actual IVA proposal should be referred to, in order to assess the failure and that if the procedure was properly adhered to.
These days all IVA proposals are mandated to include a failure clause in case there are more than 2-3 months of outstanding payments.

When the IVA fails and the creditors are made aware of it, the debtor either needs to venture into a new IVA with a 5-year payment period or initiate with an alternative route to resolute either through Bankruptcy or a Debt Management Plan.

If you have trouble in keeping up with your IVA agreement, speak as soon as possible with your Insolvency Practitioner.

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