Don't Panic — But Act Quickly
Missing a payment is serious, but it does not automatically mean your IVA will fail. The most important thing you can do is contact your IP immediately. Do not simply ignore the missed payment and hope it goes unnoticed — proactive communication is the key to resolving the situation.
What Your IP Can Do
When you contact your IP about a missed or anticipated missed payment, they have several tools available:
- Payment break — a temporary pause in payments (typically 1–3 months), particularly appropriate for short-term hardship such as illness or job loss
- Variation — a formal change to your IVA terms (such as a reduced monthly payment or extended term) requires a creditor vote but can accommodate longer-term income changes
- Payment holiday — similar to a payment break; missed payments may be added to the end of the IVA
When Does an IVA Fail?
An IVA is typically only formally failed if:
- You miss multiple payments without contacting your IP
- You provide false information about your income or assets
- You refuse to engage with the IP's attempts to resolve the situation
- You breach a specific term of the IVA (e.g., taking on new credit without permission)
If your IVA fails: Your IP may issue a certificate of termination. Creditors can then resume pursuing you for the original debts (plus interest that accrued during the IVA). In some cases, a creditor could petition for your bankruptcy. This is why communication is so critical.
Can I Take Out New Credit During an IVA?
Generally, you should not take out new credit of more than £500 without your IP's written permission during your IVA. Doing so without permission is a breach of your IVA terms and could cause it to fail.
Free debt advice: For personal advice tailored to your situation, contact MoneyHelper (0800 138 7777), StepChange (0800 138 1111), or Citizens Advice — all free, all regulated.