Your responsibilities

Full and honest disclosure

You are required to provide your Insolvency Practitioner with a full and accurate picture of your financial situation throughout the IVA. This includes all income, expenditure, assets, and debts. The obligation to disclose is ongoing: if your circumstances change, you must inform your IP promptly.

Withholding relevant information — even unintentionally — can be treated as a breach of your IVA and could ultimately lead to its failure.

Cooperating with your Insolvency Practitioner

You must cooperate fully with your IP throughout the arrangement. In practice, this means:

• Responding promptly to correspondence and requests
• Providing documents and information when asked — such as payslips and bank statements
• Participating in annual reviews and providing up-to-date financial information
• Following the terms set out in your IVA proposal
• Notifying your IP of any change in address or contact details

Failure to cooperate may be recorded as a breach of your IVA, which could ultimately lead to its failure and possible bankruptcy.

Restrictions on new credit

During your IVA, you must not obtain credit above a specified threshold — typically £500 — without first obtaining written consent from your Insolvency Practitioner. This limit applies to all forms of credit, including:

• Credit cards and store cards
• Personal loans and overdrafts
• Hire purchase and finance agreements
• Mobile phone contracts taken on credit
• Buy now, pay later services

Windfall clause

Most IVA proposals include a windfall clause requiring you to pay some or all of any unexpected lump sum you receive into your IVA. A windfall could include:

• An inheritance
• A redundancy or ex gratia payment
• Lottery or gambling winnings
• A PPI or other financial mis-selling refund
• An insurance pay-out
• A personal injury compensation award

You are typically required to notify your IP within 14 days of receiving a windfall. Your proposal will set out the specific terms. If in doubt, contact your IP immediately when you become aware of a potential windfall.

Reporting changes in your circumstances

You must inform your IP as soon as possible if any of the following apply:

• Your income increases or decreases significantly
• You change employment, become self-employed, or lose your job
• Your household composition changes (a partner moves in or out, a dependent leaves home)
• You move address
• You receive a windfall or unexpected sum of money
• Your essential expenditure changes substantially (for example, rent increases)

A change in circumstances does not automatically mean your payments will change. However, your IP needs to assess the impact and may propose a formal variation to the arrangement if required.