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Should you stop your IVA and go Bankrupt
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Should you stop your IVA and go Bankrupt

Should you stop your IVA and go Bankrupt

Have your IVA payments gone up or your circumstances changed? If the Arrangement is no longer right for you, a better option may be to stop your IVA and go bankrupt.

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Want more advice about stopping your IVA and going bankrupt? Call us (0800 044 3194) or click here to complete the form below and we’ll call you

Are you allowed to stop your IVA?

If you decide your IVA is no longer right for you, you are allowed to stop it at any time. All you need to do is cancel your monthly payment.

Once you have done this, your IVA company will normally contact you to find out what is going on.

You just have to tell them you have reviewed your situation and you no longer believe the IVA is right for you. Confirm that you want them to terminate the Arrangement. You may need to do this in writing.

They may ask you what you plan to do next. You are not legally obliged to tell them, but if you have decided to go bankrupt there is no reason not to. Once you have made your decision your IVA company can’t stop you and they can’t charge you any more money.

After you stop your IVA, you don’t need to worry about your creditors. They will not chase you for at least 3-6 months. You will have plenty of time to organise an alternative solution such as going bankrupt.

Is it sensible to cancel your IVA and go bankrupt?

There are a number of reasons why cancelling your IVA and going bankrupt might be a sensible thing for you to do.

The first is if your IVA company has put your payments up, and now you face paying back more than you originally owed. You may not have been aware this could happen, but it can. Now your IVA no longer seems such a good deal.

Alternatively, perhaps your circumstances have changed meaning you can no longer afford your payments. If your IVA company will not reduce them, or doing so would considerably extend the agreement, staying in the Arrangement may no longer be possible or reasonable.

Once you stop paying your IVA you can go bankrupt at any time. Any outstanding debt you owe is written off. There are no further monthly payments unless you have surplus income.

When are you better off sticking with your IVA?

It is not always sensible to stop your IVA and go bankrupt. In certain circumstances you will be better off sticking with your Arrangement.

This may be the case if you are a home owner. Going bankrupt might be an option if your property is in negative equity. But if there is equity, your home could be at risk.

Another thing to consider is your car. If it is worth more than £1000 you might have to sell it and get a cheaper one unless it is exempt as a business tool.

You may have already been in your IVA for a few years. Where you only have another year or so to go, stopping now is possibly not the right thing if you can help it.

Don’t stop your IVA before speaking to us. We will explain the implications and whether bankruptcy is a better option for you or not. Call 0800 044 3194 or complete the form below.

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Comments 2

  1. Chrissie

    I have decided to go bankrupt now but I have an iva they are taking payments by recurring payments I tried to stop the payment yesterday but they continually are trying to retry which is taking my balance so I’m paying twice I have informed my bank and they did put a stop on it but apparently not up to my bank so now yesterday my bank card was stolen I’m presuming I’ll get a new card now with a different number and they won’t be able to use the existing number..

    1. 08.04.2021

      Hi Chrissie

      I assume your IVA is with Creditfix or Ebenegate (part of the creditfix group). If so, it would be normal for your payment to be taken via your debit card using what is known as a continuous payment authority. Once set up these can be difficult to cancel.

      As you have discovered, simply telling credit fix to stop taking the payment doesn’t seem to work. They continue to take it regardless. If you speak to your bank, they often say they are powerless to stop the money being taken if it is requested. All very infuriating.

      Given this, my advice to people is your position is always to contact the bank and tell them your debit card has been stolen. They will then cancel the card. The new one issued should come with a different card number and / or 3 digit security code. This will then out a stop the old continuous authority payment being taken once and for all. Given your card has actually been stolen this should do the trick.

      By the way, you can find more advice on the process of going bankrupt here: The steps required to go bankrupt which I am sure you will find useful.

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James Falla
I have been advising people on how to solve their debt problems for over 20 years. During this time I have helped many people go bankrupt. I am an FCA Approved Person and the Managing Director of Wilmott Turner Financial Services (owner and operator of Bankruptcy Expert
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