Most IVAs last for five to six years. A typical arrangement runs for five years of monthly payments, while homeowners often have a term of six years to reflect the way equity in their property is handled. In both cases, when the term ends and you've met the agreed terms, any remaining included debt is written off.
The exact length isn't set in stone, though. It depends on your circumstances, and there are a few situations where an IVA can be shorter or longer than the usual five or six years.
The short answer
- Most IVAs last five to six years.
- A standard term is often 60 months (five years) of payments.
- Homeowners frequently have a 72-month (six-year) term linked to releasing equity.
- An IVA can be settled early with a suitable lump sum, or extended in certain cases.
- When the term is completed successfully, remaining included debt is written off.
Why five or six years?
The length of an IVA is a balance. It needs to be long enough for you to make a meaningful repayment to your creditors from an affordable monthly amount, but not so long that it becomes an endless burden. Five years of payments has become the common benchmark for this balance, based on the affordable figure worked out from your income and expenditure.
Every payment counts towards clearing what you owe, because once the IVA is approved, interest and charges on the included debts are usually frozen. That's part of what makes a fixed term possible in the first place.
Why homeowners often have a six-year term
If you own your home, your IVA will usually be six years rather than five. This extra year is tied to the equity release step in year five, where you're expected to try to remortgage and release some of the value in your property towards your debts.
If you can release equity, that money goes into the arrangement. If you can't — for example because you can't get a suitable mortgage — the IVA typically continues for up to 12 extra months of payments instead. Our guide on remortgaging during an IVA explains how this works in practice.
Can an IVA be shorter than five years?
Yes, in some cases. If you come into a lump sum — perhaps from a family member, a redundancy payment or a windfall — you may be able to offer it to your creditors to settle the IVA early. This is sometimes called a full and final settlement.
Whether it's accepted depends on the amount and your creditors' agreement, and it isn't guaranteed. But where it works, it can bring the arrangement to a close sooner. Any lump sum or windfall you receive during an IVA should always be declared, as it may affect the term either way.
Can an IVA last longer than six years?
An IVA can run longer than planned in a few situations:
- Missed or reduced payments — if you've had to reduce payments or take a break, the term may be extended to make up the shortfall.
- The equity clause — homeowners who can't release equity usually add up to 12 months of payments, as above.
- A variation — changes agreed with your creditors during the arrangement can adjust its length.
If you're ever struggling to keep up, extending or adjusting the term is often better than letting the arrangement collapse. Our guide on what to do if you can't pay your IVA explains the options for keeping it on track.
Does the term start from approval or my first payment?
The clock on an IVA generally runs from the point it's approved by your creditors, and your payments begin shortly after. It's a common worry that the years might somehow be counted differently, but in practice the term and your payment schedule are set out clearly in the proposal you agree to at the start, so you always know where you stand and roughly when the arrangement is due to complete.
Keep in mind that the six-year mark that matters for your credit file also runs from the start date, not the end. Because of that, the record of your IVA often falls off your credit file not long after a five-year arrangement completes, which helps when you come to rebuild.
What happens at the end?
When you reach the end of the term and have met the agreed terms, your IVA is complete. You'll receive confirmation, the debts within it are written off, and you can start rebuilding. We cover this fully in what happens when your IVA finishes.
For free, impartial information about IVAs and other debt solutions, you can also visit MoneyHelper.
How IVA Advice Online can help
If you'd like to understand how long an IVA might last in your particular case — and what could shorten or extend it — we're happy to explain it clearly and honestly. Get in touch for free, confidential advice with no obligation to go ahead.