How long does an IVA last?

How long does an IVA last?

A monthly payment IVA will generally last for 5 years. However there are circumstances which could result in the Arrangement being either extended or settled early.

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How long will an Individual Voluntary Arrangement last?

A standard monthly payment IVA will last for 5 years. How long will your credit rating be affected by the IVA? What happens to any unpaid debt once the Arrangement is over? To find out more please visit:

How long will an IVA last?

The length of a monthly payment IVA is traditionally 5 years. This is not a legally required period. It is simply a standard that has become widely accepted by creditors.

It is possible for a creditor to insist that the length of an Arrangement be extended to 6 or even 7 years. However this will only be agreed if their debt is significant and could cause the proposal to fail if their demands are not met.

A good example of a creditor who will normally demand this type of extension is NRAM (formerly Northern Rock). This is because their “together loan” would normally have been repaid over 10-20 years.

If you can make a cash lump sum available it may be possible to do an IVA without making any monthly payments at all. This is known as a full and final settlement IVA. It is completed as soon as the agreed lump sum is paid.

Can the length of an IVA increase after it is agreed?

Once an IVA is in place the number of payments that must be made into it are fixed. However this is only the case if they are then maintained and the other requirements of the Arrangement met.

If your financial situation becomes worse you may no longer be able to afford the agreed payments. In these circumstances it might be possible to reduce the monthly amount you pay.

However in exchange for being allowed to do this it is likely that the number of payments you have to make will be extended. The extension would usually be an additional 12 months.

If you are a home owner you will normally have to release equity from your property if possible. If there is equity you cannot release your payments may be extended by 12 extra months to compensate.

Is an IVA paid faster if the payments go up?

If your income increases or your expenses fall during an IVA you may have to increase the amount you pay into the Arrangement each month.

However where this happens it does not mean the Arrangement will be finished any sooner. It will last for exactly the same length of time. You will still have to pay all the remaining number of payments due.

This is because the total amount payable to your creditors in an IVA is not fixed. If you are able to pay more for any reason you will have to do so. But this simply means your creditors are repaid more of their debt overall.

In rare cases if your IVA payments increase you could end up repaying more than you originally owed. This is because where possible you are obliged to pay the total of your debt + fees + interest at 8% pa from the start date of the IVA.

Can an IVA ever be Settled Early?

It is possible to settle an IVA early. You can do this by offering to pay your creditors a one off cash lump sum in exchange for the immediate completion of the Arrangement.

The size of the lump sum required will depend on how much you still have to pay into your IVA. It will also depend on your personal circumstances at the time you make the offer.

It may be possible to settle early for a relatively small sum if you are no longer capable of maintaining the monthly payments. This may be because you have been made redundant or become ill.

If your circumstances have not changed but a third party is willing to lend you money to settle your IVA it is likely that only a small discount off the total of your remaining monthly payments will be given.

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8 thoughts on “How long does an IVA last?

  1. James says:

    Is it possible to do an IVA over 3 years? Thus effecting my credit rating over a shorter period.
    How long will it prevent me obtaining a mortgage if it is say over 3 or 4 years?

    1. Hi James

      As discussed in the above article there are only two types of an IVA. A monthly payment IVA which will always last a minimum of 5 years and a full and final settlement IVA which allows you to pay off the Arrangement immediately with a lump sum. Both affect your credit rating for the same length of time.

      It is possible to settle a monthly payment IVA early. However this will not improve your credit rating and will not improve your chances of getting a mortgage. The record of the IVA will remain on your credit file for 6 years from the start date regardless of the date you complete the Arrangement.

      Generally speaking you will not be able to get a mortgage from a high street lender until the record has come off your file.

  2. Paul says:


    My Iva payments finished in January 2019 and only now are they wanting to see if I have any equity in my house can they still do this as looking at the forums this should be done about 6 months before my final payment.

    1. Hi Paul

      If you are a home owner then it is quite normal for the terms of your IVA to include an equity release clause. As standard this clause will refer to you looking to release equity from your house in the 54th month of the Arrangement (6 months before the expiry of the IVA).

      As supervisor of the Arrangement your IVA company should have reminded you of this at the time. However given you agreed and signed up to the terms it was just as much your responsibility as theirs to remember to do this.

      If the equity in your property was not considered in month 54 then it is irrelevant who’s fault this was. It must be done before your IVA can be completed. As such you must comply with your IVA company and do it now.

  3. Darrel says:

    Can an IVA go on longer then 7 years? I took mine on for 6 years but now it is going on for 7. I have not missed any payments. Company just said it was going on for another year…. Why do I have to pay this?

    1. Hi Darrel

      An IVA cannot be extended for no reason. The payment term is fixed unless payments are missed or there is a clause in your agreement that states it should be extended if certain things happen.

      A common reason for this is known as the “home equity clause”. If you are a home owner this clause will say that if you cannot release equity from your property in the last year of the agreement then your payments must extend for another 12 months. If you are a home owner I would think this is what has happened in your case.

  4. Tommy says:

    Hi I’m 6 months in to my Iva with creditfix. My total debt was around £16,000. When my Iva was accepted 6 months ago the agreement is to pay £116 a month so my total repayment is £6960.

    I’ve payed £696 (6 x £116) so far and £246.69 (bonus) also £3432.69 (tax rebate) so I’ve payed £4375.38 so take £4375.38 away from £6960 which leaves £2584.62 left to pay in my Iva. Will I carry on paying £116 a month until the £2584.62 is payed or will it be for the remaining 4 in a half years even tho it will be payed off before then?

    Hope this made sense

    1. Hi Tommy

      Even though extra money has been paid into your IVA you will have to continue paying your monthly payments for the full remaining 4.5 years. The reason for this is that the amount you pay into an IVA is not fixed.

      The amount paid into an IVA can increase as a result of windfalls (such as your tax rebate) and if your monthly payments go up (as a result of a bonus or an increase in income). The overall affect is simply that your creditors are repaid more of the debt they were originally owed.

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