Once you take on an IVA you are legally obliged to make payments each month for the next 5 years.
During this time you may find yourself in financial difficulty due to an unforeseen cost or due to loss of work etc.
If you know or are expecting difficulty in making an IVA payment then you should tell the Insolvency Practitioner (IP) immediately.
For example you could fall ill or lose your job and even though it may only be a temporary situation the IVA could fail if you miss even one payment.
The IP may be able to get an agreement from the creditors, based on your circumstances, for one or two payments to be missed.
However should you miss a payment without telling anyone then it could be classed as a default and the danger of this is you could be declared bankrupt and have to sell your house.
If the situation is so bad that you will be out of work or unable to make payments for a period of time then the IP can negotiate with your creditors.
There is no guarantee the creditors will be happy for this to happen and they are within their rights to claim it as a default.
Under a normal IVA the IP will do a check every 6 months or every year to see that what you are paying is the maximum amount you can pay.
Note that at any stage during the 5 years of the IVA you should have an increase in income then you are required to let the IP know and they in turn may ask you to make increased payments into the IVA.
However a lot of IVA's have a clause which state that if you have any windfalls or major influx of cash then this needs to be declared to your IP.
The money will then be used to pay into the IVA and if possible pay off the IVA completely.
How much you declare you can pay at the start of the IVA is very important.
If you feel that you cannot keep up with the reduced payments required by an IVA then it's likely that an IVA is not right for you.
You will need to do your homework to establish whether an IVA is really the best option for you and the first way to establish this is work out the difference between your income and expenses.
As a guideline you would need to have at least £200 disposable income each month to pay into an IVA.
If you cannot afford £200 per month then another debt help option may be best for you.
The first thing you should do is speak with a free debt help agency and let them guide you to the right solution for your financial situation.