Recurring payments fail. It's a fact of life. Recover more of those invoices by setting a dunning policy that makes sense for your user base:
In general Recurly recommends that B2B companies set fewer emails, over a long time period while B2C companies set more frequent emails over a shorter time period.
Expire the subscription or leave it active? Leaving the subscription active is best if you have external collection efforts.
Make sure your dunning cycle is never longer than your shortest plan.