How Long Does an Individual Voluntary Arrangement Last?

How Long does an IVA last

Picking up the IVA will offer the creditors a fixed monthly payment. According to the Insolvency Act 1986 of the United Kingdom, the possible time span of the IVA is 60 months, which is five years. This has happened in most of the cases as there is no fixed time span written. 

If you can give back the amount quickly, then it will be only beneficial for you. The IVA will end quickly. But, looking at your credit report, the remark is going to stay for the mentioned period. In the case of any type of delay, the time can be extended depending upon certain circumstances. But, still, let’s get to know more about how long does an IVA last?

Possibilities of Writing Off Debts with IVA

At first, you might think that all the debts can be written off with the help of the IVA. But, that is not the actual fact. IVA provides you with the facility of adding most of the due cases to it. And, the list includes credit cards, loans, due bills, bank overdrafts and others. On the other hand, the IVA doesn’t include some of the items of secured debts like mortgages, fines, support for children and others. 

How Long does an IVA last? 

As you already know the validity of the IVA is just 5 years, but it can last longer than that. Skipped and any types of missed payments will assist in extending the time. In case, your assets are involved in this case, the matter of the release of equity shares will come forth. When you are unable to release it at the end of the year, then the time span will gradually increase. So, before opting for the IVA, make sure you research all the details. 

IVA: The Maximum Time Control

No matter what happens, the IVA will not extend itself for more than 6 years. A few experts have suggested that you must deal the entire matter with the help of your hired insolvency practitioner. He/she will talk with the creditors for adjusting the monthly payments. Always try to sort out the entire case in such a way that it reaches a positive conclusion. 

Having your own Assets?

Your assets will be the ultimate item that has the power to reflect the positive value. But, keeping it as a mortgage is quite a bit uncomfortable while the IVA is active. There is a possibility of remortgaging it in the last year of the IVA. In the utmost situation, when you are forced to include the assets, first, its determination regarding the equity value will take place. 

This will be a profit when you are forced to sell a particular asset. If the equity value exceeds more than five thousand pounds, then there will be a facility to remortgage the asset. Generally, the IVA will not let you include the assets in this matter. But, in critical cases, only the involvement of the assets can help you in repaying. 

The Final IVA

No matter what you have done to gather a good amount of money, you need to pay them all to become free from debts. This method is generally known as the Full and Final IVA. Make an approach and discuss this with your creditors. If they agree, then your IVA will soon end before its standard time span. The expected result will turn out to be positive if you involve the insolvency practitioner and let him/her talk with the creditors. 

Do you need to inform your IP about the Unexpected Inheritance?

If you receive a good amount of money accidentally, it is generally known as the Windfall payments. On the other hand, when you are using that amount of money for the repayment of debts, then it is called the Windfall Clause. 

Never think that the creditors will gladly accept the windfall clause from you. Before that, you have to inform them about the arrival of the money. Any type of payments based on redundancy or insurance cannot be accepted by the creditors. Now, the main question is how long will the IVA last with this payment? 

The Windfall payments or Clauses will not pose any type of impact upon the IVA. After informing the creditors, keep on paying them as usual, with the assistance of the Insolvency Practitioner. When the payment is done completely, any extra payment will be reverted back to you within a short amount of time. 

What is the Outcome?

Yes, of course, the outcome of the IVA is very much beneficial in nature. First, you will be free from all the debts. Second, from the IVA provider, you will receive an IVA certificate on successfully completing the arrangement. After the last payment, the IVA organization will take four to six weeks to issue the certificate. 

What is the Role of the Creditors?

On successful completion of the IVA, your credit file will be updated. This will be done by the creditors within 28-30 days. Don’t worry, whatever the changes they make, you will get a copy of it. If you see any errors, immediately ask the creditors to rectify the changes. For future preferences, you can send the soft copy of the IVA certificate to the creditors. 

Impact on your Credit File 

It seems that you have successfully paid back all the debts. But, your credit report will suffer some minor flaws. The impact of the IVA will remain for at least five to six years. Therefore, you can forget about improving your credit rating for some time. 

What about Valuable Suggestions?

While the IVA is running successfully, you might not have to do anything. But, there are a few suggestions that might come in handy and they are: 

  • Maintaining a planned budget will help you in resisting any type of extra expenses.
  • Try to build up an emergency fund for an unexpected situation.
  • Never create another debt by borrowing money.
  • Always avoid lending money to anyone 

The timespan of the IVA is very crucial and you need to take care of your funds. A small mistake will make you suffer in every other way. Never opt for any type of activity where there is the possibility of the cancellation of the IVA. Always seek advice from the Insolvency Practitioner.