Can I come off the IVA and start paying direct to my creditors?

Edit Subject

Peter, thanks for your question.

I'd like to get you an informed answer right now, but advisers from ClearDebt are not available right now to offer you an exact answer.

There is a similar question on the ClearDebt FAQ page but I note this is not strictly what you are asking.

If you can hold on till monday morning, one of my colleagues will be in touch right here!

This is an unusual request as coming out of an IVA does present several consequences:

If you decide to terminate your IVA and pay your creditors directly there is no guarantee the interest will continue to be frozen. In an IVA, this is part of the legal agreement between you and your creditors, however, once the IVA is terminated, they are no longer required to adhere to this and might demand ongoing interest.

In addition to this, it’s highly likely that once out of the IVA, your creditors will ask you to pay back the original amount of debt and if interest is added on, this may prove to last for many more years of payments than originally agreed within the IVA.

Our initial reaction to this kind of question would to be ask you why you would want to end your IVA early and deal directly with your creditors?

An IVA can be flexible if you are struggling to make your payments and in any situation, we would always advise that you call your Supervisor to discuss the reasons for considering this option.

If you still decide to go ahead, you will need to put everything in writing and give formal notice that you have decided to terminate your IVA early.

Despite this, I would still urge you to speak to your Supervisor and discuss this in full with him/her as soon as possible.