Duration of an IVA

We have answered some frequently asked questions about the duration of an IVA. Find out how long an IVA lasts and read about the circumstances which allow some IVAs to complete early.

You can also ask your own IVA question at the ClearDebt Community or by completing the form at the bottom of this page.

• How long does an IVA last?
• Can I finish my IVA early?
• Are the terms of an IVA always fixed for the duration of the IVA?

 

The questions can be categorised by the following:

Facts you need to know about how an IVA works

Benefits that will help ease the current pressures you may be feeling whilst trying to pay back your debt

Be aware of important issues which may affect your relationship with creditors, pending court action, your credit rating and lifestyle.

 

How long does an IVA Last?

Usually an IVA will last for five years (60 months), however it can be any duration and your credit rating will be affected for six years.

 

Can I Finish my IVA early?

Yes, a meeting of your creditors can be convened to offer a sum of money in a full and final settlement of your obligations under the IVA. The sum of money could be raised by:

• Re-mortgaging your property
• Funds from a relative or other third party
• Cashing in life insurance policies (subject to you obtaining expert investment advice)

Creditors are likely to agree to accept a lump sum to bring the arrangement to an early end if you can show that you are paying creditors as much as you can afford.

 

Are the terms of an IVA always fixed for the duration of the IVA?

No. Anyone in an IVA will be subject to an annual review conducted by the IVA Supervisor. If your circumstances change during the IVA, the terms of the IVA may be altered to take these changes into account. For example, an increase in income may result in IVA payments having to increase.

Typically 50% of any extra income not included in the original IVA proposal will be required to be paid into the IVA. This will depend on personal circumstances; an example of this is the break up of a marriage which often impacts on household income. These situations must be taken into account when reviewing your IVA structure and contributions.

 

Ask your own IVA questions here