If your IVA payments have become unaffordable, the most important thing to know is this: don't ignore it, and don't panic. An IVA is a flexible arrangement, and there are recognised ways to deal with a drop in income or an unexpected expense. Speaking to your insolvency practitioner (IP) early almost always gives you more options than waiting until payments have been missed.
Missing a payment doesn't automatically end your IVA. There's usually room to adjust things when life throws you a curveball — whether that's a pay cut, a job loss, illness or a sudden bill.
The short answer
- Tell your insolvency practitioner as soon as you know there's a problem.
- A payment break can pause payments for a short period if your income drops temporarily.
- Reduced payments can be agreed if your change in circumstances is longer-lasting.
- A variation lets creditors formally agree new terms to keep the IVA going.
- Doing nothing is the main thing that puts an IVA at risk of failing.
First step: talk to your insolvency practitioner
Your IP manages your arrangement and is there to help it succeed, not to catch you out. As soon as you realise you might struggle, get in touch and explain what's changed. They deal with situations like this every day and can talk you through which of the options below fits your circumstances. The earlier you raise it, the more room there is to find a solution.
Your options if you can't pay
Payment breaks
If your money troubles are short term — a temporary drop in hours, say, or an unexpected repair — a payment break may let you pause or reduce payments for a limited period, often up to a few months. The missed payments are usually added to the end of your IVA, which means the arrangement is extended rather than lost.
Reduced payments
If your income has fallen for the longer term, your IP can look at lowering your monthly payment to a level you can genuinely afford. This is worked out the same way as your original payment — from your income and essential spending — so it's worth understanding how IVA monthly payments are calculated.
A variation
Bigger or lasting changes may need a variation, where your IP puts a revised proposal to your creditors for approval. This is a normal part of how IVAs adapt over time, and it can cover reduced payments, an extended term, or other adjustments to keep the arrangement on track.
What happens at your annual review
Every year your income and expenditure is looked at again as part of your IVA annual review. If your finances have shifted, this is a natural point to reassess your payment. But you don't have to wait for the review — if you're struggling now, raise it now.
What if the payments still can't work?
If, even after adjustments, the arrangement simply isn't sustainable, it's important to understand the consequences before things reach that point. Our guide to what happens if your IVA fails explains where you'd stand: broadly, the protection an IVA gives you would fall away and creditors could pursue the original debts again, including any interest.
At that stage it's worth looking again at the wider picture. Depending on your situation, alternatives such as a debt management plan, a debt relief order or even bankruptcy might be more appropriate. It can help to compare whether an IVA or bankruptcy better suits where you are now.
Common reasons people struggle — and where to turn
- Losing your job: there's practical guidance in our guide to dealing with debt after losing your job.
- Rising costs: reviewing your budget with your IP can free up breathing room.
- Health and stress: money worries take a toll, and there's free support out there — see debt and mental health.
What you should avoid doing
When money is tight it's tempting to reach for the wrong fix, so it helps to know what to steer clear of. Try not to simply stop paying without a word to your IP — a missed payment with no explanation is far more damaging than a phone call asking for help. Equally, avoid borrowing to cover your IVA payment. Taking on new credit of £500 or more during an IVA usually isn't allowed without permission, and piling fresh debt on top of an unaffordable arrangement rarely ends well. And don't be tempted to dip into money set aside for priority bills like rent, your mortgage or council tax, as the consequences of falling behind on those are more serious than a short pause to your IVA.
Do this instead
- Pick up the phone to your IP the moment you see trouble coming.
- Go through your budget honestly, so any reduced payment reflects reality.
- Gather proof of your change in circumstances — a payslip, a letter, a benefits statement.
- Keep paying what you can, even a reduced amount, while a solution is agreed.
How IVA Advice Online can help
If you're worried about keeping up with your IVA, you don't have to work it out alone. Get in touch with IVA Advice Online for free, confidential advice, and we'll help you understand your options with no pressure and no judgement. Our guidance on your choices is always free, and we'll only tell you about a fee if a solution you pick has one. You can also get free, impartial money help from MoneyHelper.