What happens if an IVA has failed?

Why do IVAs fail?

IVAs fail when the person paying can no longer keep to the terms, and the protocol's standard terms (opens in a new tab) treat three or more months of missed payments, false or misleading information, or debts 25% or more above your estimate as a breach.

The standard terms give an emergency expense and an unexpected drop in income as examples of a change that can stop you paying in full. Not taking part in the annual review, or not doing what the supervisor reasonably asks, can also end a protocol IVA.

For how an IVA is meant to run from start to finish, read how an IVA works.

How often do IVAs fail?

About one in three IVAs registered between 2016 and 2018 ended early (terminated), according to the Insolvency Service's statistics (opens in a new tab) published in February 2026; more recent IVAs are still running, so their final rate is not yet known.

Those figures cover every IVA in England and Wales, protocol and bespoke alike. The same statistics say about one in 17 IVAs registered in 2024 ended within their first year. They describe IVAs in general and say nothing about how any one IVA, or any one provider's IVAs, will go. The next figures are due in February 2027.

Can a struggling IVA be saved?

A struggling protocol IVA can be kept going if you tell your supervisor early, because the supervisor can agree payment holidays or a lower payment without asking your creditors, and can ask them to approve a bigger change (standard terms (opens in a new tab)).

The supervisor can reduce your payment by up to 20%. A bigger reduction needs your creditors to vote on a variation, and in the first two years that should only happen if the change could not reasonably have been foreseen when the IVA began.

Where a breach looks likely to end the IVA, the supervisor should consider proposing an early settlement to your creditors, weighing how long you have paid, how you have co-operated and what you could realistically repay later. How extensions work is explained in how long an IVA lasts.

Can I take a payment break in an IVA?

In a protocol IVA the supervisor can allow payment holidays adding up to the equivalent of nine months' payments, which are usually added to the end of the IVA (IVA Protocol 2025 (opens in a new tab)).

The supervisor can agree them without asking your creditors, as long as you give full information about why you cannot pay, and the IVA is extended by no more than 12 months to make them up unless you cover the shortfall another way (standard terms (opens in a new tab)). A bespoke IVA follows its own terms. Ask before you miss a payment: arrears of three months or more with nothing agreed are a breach.

What happens if my IVA fails?

If an IVA fails, the supervisor issues a certificate of termination, your creditors can chase the unpaid balances again, with the interest and charges that built up during the IVA, and the supervisor or a creditor can petition for your bankruptcy (standard terms (opens in a new tab)).

It starts with a notice of breach, which gives you one month to put the breach right, propose a reasonable plan to do so, or explain it. If you do not, or you tell the supervisor you cannot, the supervisor must issue the certificate and report it to your creditors within 28 days. The exceptions are where the supervisor asks your creditors to vary the IVA instead, or decides to petition for your bankruptcy.

You do not get back what you have paid. Because the early payments went more to fees than to your debts, you may have repaid less than you expected (Key facts (opens in a new tab)). When a protocol IVA ends this way, your practitioner should point you to free, regulated debt advice (IVA Protocol 2025 (opens in a new tab)).

Can I be made bankrupt if my IVA fails?

You can be made bankrupt if your IVA fails, because the Insolvency Act 1986 lets the supervisor, or any creditor bound by the IVA, ask the court for a bankruptcy order (section 264 (opens in a new tab)).

The court can make the order only if it is satisfied that you failed to keep to the IVA, gave false or misleading information, or did not do what the supervisor reasonably required (section 276 (opens in a new tab)). If it does, the costs of running the IVA are paid first out of your estate. Under the standard terms a bankruptcy petition is one option, and termination is the default.

Read how bankruptcy works for what a bankruptcy order would mean.

Can I stop my IVA and go bankrupt instead?

You can apply for your own bankruptcy while in an IVA, but a bankruptcy order does not automatically end the IVA: what happens depends on its terms, and in a protocol IVA the supervisor can terminate it at your written request, so talk to your supervisor first (official receivers' guidance (opens in a new tab); standard terms (opens in a new tab)).

Where an IVA says nothing about bankruptcy, any trust it created over your assets can continue after the bankruptcy order. Whether bankruptcy is then the better route depends on your circumstances, so compare the two in IVA or bankruptcy before you decide.