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Pay your IVAOnce your IVA has been accepted you must start to pay it. For most people this means starting and maintaining the agreed monthly payments.

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When do you start to pay your IVA?

You will be informed that your IVA has been accepted by your Insolvency Practitioner (IP). This will normally be on the same day as the Creditor’s Meeting is held.

Once the Arrangement is accepted the payment commitments you have made become legally binding. If you have agreed to make monthly payments you will need to start these straight away.

Generally speaking you will be asked by your IP to set up a Standing Order from your bank so the payment is made regularly each month. You can set this up so the payment leaves your account at the most appropriate time during the month for you.

You may have agreed to pay your IVA in a single lump sum. If so the Arrangement will normally stipulate the timescales within which this payment must be made.

What is an IVA Annual Review?

A monthly payment IVA will normally last for 5-6 years. As part of the terms of the agreement each year on the anniversary of the start date a review of your circumstances must be carried out.

On or just before the anniversary date your IP will contact you. They will ask you to submit a new income and expenditure statement. They are also likely to ask you to send in recent wage slips and bank statements so the information you provide can be verified.

You must always complete and return the new income and expenses statement. This is the case even if your circumstances are the same.

If your circumstances have not changed you should complete the new income and expenses statement using the same information as stated in your original IVA Proposal. However it must still be completed and returned.

What if your Circumstances Change during your IVA?

It is common for your circumstances to change during an IVA. Your financial situation may improve because you start earning more. Alternatively you might become worse off if your income falls or your living expenses increase.

If your income improves you may have to increase the amount you pay into your IVA. Your IP will re-calculate your disposable income. You will have to add 50% of any increase to your IVA payment.

If your circumstances change you should tell your IP immediately. Do not wait until your next annual review. Delay could result in your Arrangement getting into arrears.

Your financial situation might become worse for a number of reasons. Your income might fall due to a job change. Alternatively your expenses may increase for some reason.

If the situation is temporary your IP might be able to offer you a payment break. You can then restart your payments when the situation gets back to normal. If the change is permanent it might be possible to reduce the ongoing payments you make.

What if you get a Windfall during an IVA?

A windfall is a sum of money that you receive unexpectedly. This might happen for a number of reasons. Perhaps you get a compensation pay out or inherit some money. You might even win the lottery.

If you get a windfall during an IVA you are obliged to pay 100% of what you receive into the Arrangement. This money is then used to increase the amount that is returned to your creditors.

Depending on the terms of your IVA you might be able to keep your windfall if it totals less than £500. Because of this rule some IPs allow you to keep the first £500 of any windfall you receive.

After paying a windfall into your IVA you have to continue making your normal monthly payments. It normally does not mean that the Arrangement will be paid off any earlier. This would only happen if the amount you have received is sufficient to pay off your original debt in full plus the IP’s fees and interest.

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