How long does an IVA last?

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An IVA is a formal agreement between you and your creditors (the people you owe money to) where you agree to make monthly payments towards your debt in exchange for your remaining balance being written off.

The thought of only repaying a portion of your debt can be an attractive prospect, but how long an IVA lasts depends on several factors, such as whether you can release equity from your home and if you’ve stuck to the terms of your arrangement.

This article will outline how long an IVA lasts, why your IVA might be extended, and if you can exit an IVA early.

What is an IVA?

An Individual Voluntary Arrangement (IVA) is a legally binding agreement between you and your creditors to repay your unsecured debts over a set period.

Because IVAs are legally binding, they must be set up and managed by an Insolvency Practitioner (IP), who is a financial professional licensed by the Insolvency Practitioners Association (IPA) to act on behalf of the individual entering the IVA.

Most IVAs involve a series of agreed-upon monthly payments which are sent directly to your IP. They will then deduct a set amount to cover their fees (around 20% of your total payments) before distributing the remaining money among your creditors.

Once your IVA has been approved, all interest and charges will be frozen and your creditors will be instructed to stop contacting you about the debt. This can allow you to focus on chipping away at your debt without your creditors calling you or your debt level increasing.

How does the IVA process work?

The IVA process can be broken down into a series of steps and usually takes around six weeks from start to finish. Here is a quick guide to what you can expect when you apply for an IVA:

Initial consultation with an IP

The first stage in the IVA process is scheduling a consultation with an IP for free debt advice. During this meeting, all available options will be discussed to ensure an IVA is the best solution for your financial situation at this time.

This meeting is also a great opportunity for you to ask any questions you have about the IVA process, from how much it’s likely to cost to how your assets could be affected. IPs are experienced, qualified professionals and will always act in your best interests throughout your arrangement.

Drafting your IVA proposal

The next stage in the IVA process is drafting your IVA proposal. Before your IP can do this, they will require some additional information about your income, expenses, and spending habits.

Once the necessary documentation has been provided, your IP will get to work drafting your IVA proposal before sending you a copy to review and sign.

Voting on your IVA proposal

The most important stage in the IVA process is getting your creditors to agree to the terms of your arrangement during a ‘creditors meeting’ or ‘meeting of creditors’.

This may sound like your creditors are meeting in person to discuss your financial situation, but it’s simply the name given to the process and the date of the meeting is used more as a deadline for your creditors to cast their votes (usually online, over the phone, or by email).

For your IVA to go ahead, the creditors to which you owe 75% of your total debt must confirm they are happy to proceed. Even if the rest of your creditors disagree, the IVA will still go ahead and all of your creditors will become legally bound by the terms of your arrangement.

Starting your IVA

The final stage of the IVA process will mark the beginning of your arrangement. Once your IVA starts, all interest and charges will be frozen, your creditors will be instructed to stop contacting you about the debt, and your assets will be protected.

Typically, your first payment will be due within six weeks of your IVA starting and on a monthly basis thereafter.

How long does an IVA last?

Most IVAs last five years (60 monthly payments).

However, an IVA can be extended by 12 months to allow you to make up the total amount stated in your IVA proposal, locking you into your arrangement for a total of six years (72 monthly payments).

This can happen if you miss payments, have a temporary payment break, request lower monthly payments, or fail to release equity from your home when requested during the last few months of your arrangement.

Five years may sound like a long time but compared to other debt solutions – such as a DMP which can last 10 years – an IVA can allow you to repay a portion of your debt in just a few short years and write off your remaining balance.

How will an IVA affect my credit rating?

When you enter an IVA, it will be visible on your credit report for six years. For most IVAs, this means it will be visible for another 12 months after your arrangement ends. During this time, your credit rating will be negatively affected and you’ll struggle to access most forms of credit, such as a mortgage, loan, bank account, or phone contract.

Once your IVA has been approved, your details will also be added to a public register called the Individual Insolvency Register (IIR) until three months after your arrangement comes to an end. Because this database is primarily used by lenders when confirming details of your insolvency, it can harm your chances of qualifying for further credit.

Furthermore, most IVAs contain a clause stating that you can’t borrow more than £500 of credit during your arrangement without seeking permission from your IP. So if you want to take out a £1000 loan or car finance agreement during your IVA, you must not only inform your IP but get their approval.

Failure to inform your IP is a breach of your IVA which could lead to your arrangement failing. When this happens, you and your creditors will no longer be bound by the terms of your IVA and you’ll be forced to find another way to repay the debts included in the arrangement. This will also put you at risk of legal action from your creditors.

Why has my IVA been extended?

Most IVAS last five years, but your arrangement can be extended to six years for several reasons. The main aim of an IVA extension is to allow you to make up for any money missing at the end of your arrangement that should have been repaid through the IVA.

For example, if you only repaid 40% of your total debt over five years instead of the 45% outlined in your IVA proposal, your arrangement will be extended by another 12 months to allow you to repay the remaining 5%.

The most common reasons for an IVA extension include:

  • Missing several monthly payments
  • Proposing low monthly payments (£100 or less)
  • Reducing your monthly payments
  • Requesting a temporary payment break
  • Failing to release equity from your home when requested

Can I pay off an IVA early?

Most IVAS last five years because the total balance is repaid through a series of affordable monthly payments, but you may be able to pay off your IVA early by offering a lump sum payment.

For example, if you receive a financial gift from a friend or family member, you may be able to put it towards your IVA to speed up the repayment process and leave your arrangement early. This may require you to submit proof that the money was intended for that purpose, but this usually only requires written confirmation from the friend or family member.

However, if you receive a windfall (e.g. lottery win, inheritance or bonus) at any point during your IVA, a large portion of it must go towards your arrangement. This is because, when you sign your IVA proposal, you agree to put any windfall payment over £500 towards your arrangement.

This doesn’t necessarily mean you can exit your IVA early – only that a bigger portion of your debt has been repaid. The only time you may be able to pay off your IVA early is if the money received is enough to cover your remaining balance plus interest.

Remember, this is only general guidance and the final decision will depend on your individual circumstances.

What is a full and final settlement?

Most IVAs involve you paying a set amount towards your debt each month for an agreed length of time (usually five years).

But if your financial situation makes you ineligible for a contribution-based IVA, you may be a suitable candidate for a lump sum IVA or full and final settlement IVA instead. This is when you agree to pay a set amount upfront as opposed to five years’ worth of monthly payments.

This type of IVA can allow you to settle your IVA early – removing the need to make monthly payments for five or six years – but it requires a formal vote. Because of this, you’ll only be given one chance to submit your full and final settlement offer.

Furthermore, while this will remove your entry from the IIR, your IVA will remain on your credit report for six years from the date your arrangement was approved.

What happens after my IVA finishes?

Once you’ve made your final monthly payment, your IP will check you’ve fulfilled the terms of your IVA and can be discharged from your remaining debts.

When your IP has confirmed this, you’ll be sent a ‘certificate of completion’ confirming your IVA is complete and your debts have been cleared. This will be issued immediately but can take up to 12 weeks to arrive.

The IIR will be updated with your entry changed to ‘completed’ for three months before being removed completely. This information will then be sent to each of the credit reference agencies (Experian, Equifax, TransUnion) so your credit record can eventually be updated (once six years have passed since the start of your IVA).


An IVA is a formal debt solution that can help you repay your unsecured debt through a series of affordability-based monthly payments.

Most IVAs last five years, but your arrangement can be extended to six years if your total repayments fall below the amount outlined in your IVA proposal. Similarly, your arrangement can be completed sooner if you have the funds to offer a full and final settlement offer.

When it comes to dealing with unaffordable debt, never suffer in silence. Whether you’re struggling with secured loans or personal loans, there are various debt charities and organisations available to help you regain control of your finances and fix your debt problems for good.

Key Takeaways

The process of setting up an IVA usually takes around six weeks from start to finish
An IVA will be visible on your credit record for six years and on a public register until three months after your arrangement ends
Most IVAs last five years (the equivalent of 60 monthly payments)
IVAs can be extended by an extra 12 months if your repayments fall short of the amount outlined in your IVA proposal
You may be able to settle your IVA early by offering a full and final settlement amount upfront instead of making monthly payments
Maxine McCreadie

Maxine McCreadie

Author/Debt Expert

Maxine McCreadie, prominent personal finance writer featured in Vogue and Yahoo News, delivers practical guidance, simplifying money management and championing financial literacy.

How we reviewed this article:


Our debt experts continually monitor the personal finance and debt industry, and we update our articles when new information becomes available.

Current Version

November 16 2023

Written by
Maxine McCreadie

Edited by
Ben McCormack

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