How Long Does An IVA Last? Know IVA Information

The Individual Voluntary Arrangement, better known as IVA, is an ultimate insolvency solution that allows debt-ridden individuals to be debt-free within a relatively limited duration. Although the concept of How Long Does An IVA Last is not new, people often have scepticism about the impact of IVA. That’s why, in this handy article, we have outlined essential IVA information along with a reliable stepchange IVA contact number for you. For IVA help, you will find your answers here. 

Individuals have an unclear concept about IVAs that it hurts your professional and personal life, and also, there will be a permanent stain on your credit rating. While there may be a slight chance for that to happen, it will be only due to the sole fact that it was not managed well. But that’s not the case every time. On a good note, quality IVA help by your IVA service provider can help your finances look satisfactory in no time. 

You can improve your financial situation by collecting reliable IVA information and following the service provider’s IVA advice to rebuild your affected credit profile. Before we proceed to estimate how long an IVA lasts, there is a brief introduction on Individual Voluntary Arrangement (IVA) right ahead. 

What is an IVA?

An Individual Voluntary Arrangement, or IVA, is the ideal debt solution to get rid of your unsecured debts. It’s a voluntary agreement that binds you and your number of creditors into a customised debt management plan to repay your debts. You decide on a monthly payment amount (that you can afford after all the other expenditures) to pay off over a specific duration to your creditors. If you cannot decide on an amount by yourself, you will receive calculated IVA advice from the IVA service provider themselves. 

For better understanding, here is a small example for you. Let’s say that you agree to repay a certain percentage of your salary or income each month or to repay a direct lump sum amount to your creditors. On regular and successful repayment of the debt money, it is the responsibility of the creditors to waive off any outstanding debt of yours. So, with IVA help, you do not have to repay the entire money owed. 

While IVA is a legal agreement between you and the creditors, there involves another party termed as trustee or Insolvency Practitioner (IP). A trustee or IP acts on your behalf to directly deal with your creditors and handle other IVA agreements, such as regular IVA payments. A trustee or IP will be assigned to you by your service provider. 

You can obtain all the IVA information and other related IVA advice on the reliable Stepchange Debt Advice UK website. While IVA advice is offered for free, getting IVA help comes at a price.

How long does an IVA last?

The Individual Voluntary Arrangement (IVA) was mandated under the Insolvency Act 1986. The Act (IA 1986) states that a typical How Long Does An IVA Last for a minimum of three months or even up to seven years. The set duration is extendable in case of missed payments. So, prudent IVA advice is not to miss any IVA payments or violate any Agreement rules if you do not want to extend your Agreement duration. 

None of the available IVA information provides the standard period for the “How long does an IVA last?” question. The longevity of your IVA largely depends on your ability to make regular monthly payments. Creditors too can request with the trustee to extend the IVA, while that is a sporadic case. 

The Agreement contains all the IVA information, including how long the IVA will last. The debtor proposes this IVA duration to the creditor in the initial stage. The longevity of the IVA often depends on various variables. Such variables mainly include the debtor’s nature and source of income as proposed in the IVA, assets, expenditures, etc. 

IVA Information at Just One Call

Most of the standard IVAs have a typical duration of up to five years, at most from the date of commencement. However, any noticeable change in the financial situation of the individual/debtor leads to a change in the IVAs duration. The factorial circumstances depend on the attitude of creditors as well. If you do not wish to extend your IVAs duration, you can ask your trustee or IP for IVA advice. 

A “one-off” IVA proposal usually is of a shorter duration. In this type of IVA, the debtor proposes to the creditor to repay the debt in a lump sum. Such a lump sum could be the proceeds from the sale of the debtor’s property, sale of any valuable assets like a car or real estate, financing from the debtor’s spouse or other family members, or remortgage of property for equity. 

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Apart from that, if the debtor owns some assets and has a regular income, the IVA could be a combination of lump sum and affordable monthly payments. However, such IVA combination payments usually last for about five years or even more. This IVA proposal comes off as a long-term IVA duration. If you can afford long-term IVA, you better do proper research and seek IVA advice accordingly. 

While debtors chose to go for lump sum IVA payment or a combination of lump sum and available disposable income, two more factors could potentially affect the IVAs duration. Since creditors also gave the right to forward their request, they could propose extending the IVA duration. They could obtain the probable equity of the debtor’s property that is likely to build up over the five-year course or improve the dividend. The second possible factor is the likelihood of potential change in the debtor’s financial situation. If the debtor’s financial condition worsens, the IVA would be extended with reduced monthly contributions. 

That is to say, IVAs generally last for four to five years with small monthly contributions by the debtor. However, if you want to enter into an IVA, ensure that you acquire all the vital IVA information. You can get back to us here for reliable Step Change Scotland IVA advice or IVA help if you want further IVA information, Call 03338803165 for Free IVA Information by Stepchange debt charity uk.