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How long does an IVA last?
How long does an IVA last? In the vast majority of cases, the answer is simple: 5 years.
It's not always so straightforward, however. Some IVAs can last longer than 5 years, while others can be shorter, depending on your circumstances.
Most IVAs last 5 years. You will need to make 60 monthly payments and keep to the terms (like freeing up equity from your property and having regular reviews, for example). Once you have completed your IVA, your creditors cannot take further action against you.
Longer & shorter IVAs
However, things don't always happen the way you expect. A lot of things can change in 5 years, which is why IVAs are designed to offer a some flexibility.
- Your financial situation might improve
If you have a sudden windfall, you may be able to bring the IVA to a successful conclusion before the 5-year period is up by paying your creditors a lump sum. This is known as a 'full and final settlement'.
- Your financial situation might worsen
If your income drops or your essential expenditure rises, you might find you can't keep up with your payments for the full 5 years. Your creditors may be willing to consider an alternative - they may, for example, agree to accept smaller payments on the grounds that you'll keep on making for a number of months longer than originally agreed.
Either way, your IP will play an important part in this.
Your IP isn't just there to set up your IVA. They're there throughout the IVA, acting as a point of contact between you and your creditors and dealing with any issues that come up.
If your situation changes significantly, your IP can re-assess your situation and figure out your best way forward.
If appropriate, they'll draw up an IVA Variation - a new proposal that tells your creditors about the changes you'd need to make to the IVA so it can reach a successful conclusion.
Like your original IVA Proposal, the Variation will have to be accepted by creditors who collectively represent 75% by value of the creditors who vote.
Alternatively to apply for a free call-back click here
Subject to eligibility and acceptance. Debt write off applies to unsecured debts and only on completion of an IVA, alternative solutions may be offered. Your credit rating will be affected for 6 years and homeowners may be required to release equity. Failing to complete an IVA once agreed could put you in a worse financial situation. Calls may be recorded and are usually free from UK landlines. Mobile phone users costs may vary and should check with their network provider.
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