How long does an IVA last?

How long does an IVA last?

You were told a number when your IVA was set up, and that number is a plan rather than a promise. An IVA lasts as long as your proposal says it does.

For a standard consumer arrangement that is normally five years of monthly contributions, and a term can be set at six years where you own a home with equity in it, which is settled when the proposal is drafted rather than decided later on. Those are the usual shapes rather than rules, because an IVA is a bespoke agreement: your insolvency practitioner drafts a proposal around your circumstances, your creditors vote on it, and whatever they approve is what binds you.

Some arrangements are shorter, particularly where a lump sum forms part of the deal. If you want the answer for your own case, the proposal and the chairman's report from the creditors' meeting are the documents that hold it, not a general figure.

What decides the length of your IVA

Three things. The first is your monthly contribution, worked out from a budget that leaves your essential living costs covered, because the contribution and the term together decide what creditors are being offered.

The second is what your creditors ask for. They can vote to approve your proposal with modifications attached, and a longer term is one possible modification, so the arrangement you end up in is not always the one that was drafted.

The third is whether the proposal includes anything beyond monthly payments, such as a lump sum from a third party or an obligation to try to release equity in the final year. None of this is decided after the fact.

It is all fixed at approval, which is why reading the approved version matters more than remembering what you were told at the outset.

Why an IVA can run longer than planned

This is the part worth understanding clearly. An IVA is measured in contributions met, not months elapsed, so anything that interrupts the payments tends to be added to the back of the arrangement.

A payment break agreed after illness or a job loss is usually recovered by extending the term rather than written off. Missed months can be added on for the same reason.

Where a proposal required you to try to release equity from your home near the end and a suitable remortgage could not be arranged, the usual provision was a further twelve months of contributions on top of the agreed term, so a five-year arrangement could run to six. Arrangements approved more recently tend not to work this way, because the current protocol sets the longer term at the start in place of any equity release.

Your practitioner can also propose a variation partway through if your circumstances change materially, and creditors vote on that in the same way. The effect is that an IVA which started as a five-year arrangement can finish meaningfully later, and the completion date, not the anniversary, is what counts.

Why the length of your IVA is not the six years on your credit file

These two get tangled, and they are genuinely different clocks. The length of the arrangement is how long you make contributions.

The six years is a credit reporting rule: the IVA is recorded on your file for six years from the date the arrangement started, not from the date it finished. For an arrangement that ran to term, those clocks land close together, and the marker tends to drop shortly after completion.

For an arrangement that was extended, the marker stays until the arrangement is completed, so a longer IVA means a later removal date. In other words the file clears at whichever comes later, six years from the start or the day the arrangement actually completes.

Our guide on when an IVA leaves your credit file sets out how that date is worked out and what to do if the entry is still showing after it should have gone.

How to find out when yours is actually due to end

Ask, and ask in writing. Your insolvency practitioner has to review the arrangement annually and send you a report, and that report is the natural place to request a current position: contributions made to date, contributions still required, and the expected final payment month.

If the annual report is not due for a while, there is nothing stopping you asking for a statement of account at any point. It is worth doing this every year rather than once, because the answer moves whenever a payment is missed or paused, and because knowing the real end date is what lets you plan for it.

Keep the replies. If you later need to prove when the arrangement finished, or chase an entry that has not been removed, that correspondence is the evidence.

What happens when the arrangement ends

The final payment is not the finish line on its own. Your practitioner carries out closing work and then issues a completion certificate, which is the document that confirms the arrangement was completed and the remaining balances are written off.

It can take a few weeks after your final payment, and sometimes longer. Chasing it is normal.

Once it is issued, check your reports with all three credit reference agencies: the IVA entry should come off in line with the timing above, and each account included in the arrangement should show as settled or closed with nothing recorded as missed afterwards. From there you can start rebuilding.

Your Comeback Plan maps the dates that matter on your own file, so you are not guessing.