Missing a Payment, Question by Question
What happens, what to do, and how to avoid your IVA failing.
What happens if I miss an IVA payment?
Nothing drastic happens straight away. One missed payment does not end your IVA. Your supervisor will want to know why, and will usually look at how to get things back on track, by catching the payment up, adjusting it, or arranging a short break. The real risk comes not from a single missed payment, but from ignoring the problem and letting arrears build.
What should I do first?
Tell your supervisor as soon as you can. A quick call or message explaining what has happened, a one-off expense, a drop in hours, a delayed wage, lets them help before things escalate. They deal with this regularly and would far rather hear from you early than discover missed payments at your annual review. Do not simply cancel the payment and say nothing.
How many payments can I miss?
There is no exact free pass, but most IVAs allow some flexibility. In practice, formal action usually begins once arrears reach around three months' worth of payments. Before that point, there is normally room to catch up or adjust. After it, your supervisor is required to issue a formal warning, so it is far better to act well before you reach that stage.
What is a Notice of Breach?
It is a formal warning, not the end. If arrears build up, your supervisor must send a 'Notice of Breach' setting out what has gone wrong and giving you a period, usually around a month, to put it right. It is a chance to fix things, by clearing the arrears, agreeing a new arrangement, or proposing a change. Responding to it promptly is important, but it does not mean the IVA has failed.
Can I catch up on a missed payment?
Often, yes. If the shortfall was a one-off, you may simply be able to make up the missed amount, or spread it over the coming months. Your supervisor can also add the missed payments to the end of the IVA by extending the term slightly, so you are not left with an unaffordable lump to find. The right approach depends on why the payment was missed.
Can my payment be reduced instead?
Yes, if the problem is ongoing rather than a one-off. If your income has dropped or costs have risen, your supervisor can usually reduce your payment, by a small amount on their own, or by more through a formal variation with your creditors. This is often a better answer than struggling to meet a payment you can no longer afford. The point is to keep the IVA sustainable.
What if I keep missing payments?
That is when an IVA can fail. If payments stop and the breach is not resolved, the arrangement can be terminated, at which point your debts return with any frozen interest, and creditors can pursue you again. This is the outcome to avoid, and it is almost always avoidable by talking to your supervisor early and being honest about what you can afford.
I'm worried about a missed payment, what should I do?
Get advice and speak up. If you have missed a payment or know you are about to, contact your supervisor, and if you would like independent help, a free adviser from a service like StepChange or MoneyHelper can talk you through your options. Acting early keeps the most doors open, and there is no need to face it alone or in a panic.
