Dealing with Creditors When IVA Failed After Years In One

Are you worried because your IVA has failed after 4 years? You are in the right place for answers. Over 170,000 people visit our website to get guidance on debt solutions each month, so you’re not alone.

In this easy-to-read guide, we’ll explain:

  • What happens when an IVA fails.
  • How to talk to your creditors so they don’t take you to court.
  • Ways to write off some of your debt.
  • Other things you can do if your IVA fails.
  • How to cope if you can’t afford to pay your debts.

Our team has lots of experience in dealing with debt problems, so we understand how scary it can be when an IVA fails.

Let’s learn more about how you can deal with your creditors and avoid bankruptcy.

What Happens When an IVA is Terminated?

Your insolvency practitioner (IP) will notify you when your IVA fails and will send you a letter of termination. 

Along with the letter of termination, you will also be provided with a failure report of your IVA by your insolvency practitioner. 

The failure report is a crucial document which you can utilise to plan your next step for addressing your debts. 

The failure report will include details about your remaining debts, your creditors as well as how much debt you owe to each creditor. 

Of course, depending on your financial circumstances and by assessing the failure report, you can start looking at other options to take care of your remaining debt. 

The Insolvency Service will also be informed by your IP to ensure that they know that your IVA has failed so they can remove your name from the Individual Insolvency Register. Your name will typically be removed from the IIR within three months of your IVA failing. Please note that your IVA will also be marked as failed in your credit file and it will stay within your credit file for six years from the date on which it was approved.

Its important to note that once your IVA fails, your IP will also inform your creditors. Thus, your creditors will now know that they are no longer bound by the restrictions placed on them due to your IVA

Hence, its extremely important that you contact your creditors in order to ensure that they dont start pursuing action to make you bankrupt. 

What Should I Tell My Creditors to Prevent them from Pursuing Legal Action Against Me Once My IVA Fails? 

As I mentioned earlier, once your IVA fails, your creditors will be free to take legal action against you. Thus, its very important that you contact them as soon as you can and let them know what your next steps are going to be so that they dont try to make you bankrupt. 

Of course, for your creditor(s) to not pursue action to make you bankrupt, they need to have some confidence in your ability to take care of your debts. In order to assure them that youre going to pay your debt back to them, you need to give them a plan of what your next step is going to be. 

So, once your IVA fails, youre going to have to start exploring alternative debt solutions and options immediately. 

You can contact your IP and they may be able to get you in touch with a professional advisor who will discuss alternative options with you. I highly advise that you seek professional advice at this point and not make a decision on your own. 

You can seek advice from a professional financial advisor that your IP may suggest to you or you can seek advice from other agencies as well. I highly advise you get help from independent charities such as Stepchange or Payplan. When seeking help regarding debt payments, its important that you only contact agencies that are authorised and regulated by the Financial Conduct Authority. 

Once you have an idea of what youre going to be doing next, you can get in touch with your creditor(s) and let them know so that they dont try to make you bankrupt. 

Maintaining contact with your creditor(s) when your IVA fails is extremely important. If you ignore them, then they are most certainly going to pursue legal action against you. 

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