How Long Will an IVA Last?

Wednesday, May 18, 2011, AM | Leave Comment

Most IVAs last five years – this is the standard time period that lenders expect them to last. However, in some cases it may be possible to arrange a longer or shorter IVA, while in other cases an IVA may last less time than expected.

Background to IVAs

A typical IVA involves making monthly payments towards your unsecured debts for the duration of an agreed period. The payments you make will be based on what you can afford to pay once you’ve covered all your other essential costs.

The idea is that your IVA will enable you to pay off a reasonable portion of your unsecured debts over time, and at the end of the agreed period the rest will be written off.

Duration of an IVA

As mentioned earlier, most IVAs last five years, but there are situations in which it could be different.

Unusual circumstances

It may be that you can afford to pay a reasonable proportion of your debts within only three or four years – in which case your IVA could be shorter – or that you need a little longer to pay a good amount of what you owe, in which case your IVA could last longer. Both scenarios are rare, but an IVA is agreed at your lenders discretion, and they may decide that a longer or shorter duration is better for all involved.

Your IVA is no longer suitable

This can happen for two reasons: either your circumstances improve significantly and you can start making regular payments again, or your circumstances deteriorate and you can no longer keep up. Either way, if there is no reason for your IVA to continue then your IP will bring it to an end.

If this is because you couldn’t keep up, you’ll need to look at the other available options for tackling your debts, such as bankruptcy or a Debt Relief Order.

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