IVA's

[razamataz_]

What is the longest length of time an IVA can run for?

Can it be done for £25000 on say £100pm payments for a tenant on Benefits? If someone wants to avoid bankruptcy.
[88] razamataz_

[Oliver]

As IVAs are individual the amount of time which one can last is indefinite. However, the majority of IVAs last for 5 years and it would be unlikely to find an IP who was willing to propose an IP for any longer than 6 years. Their are many reasons for this such as the practicality of having light at the end of the tunnel, which would be diminished of the IVA was to last for a long period of time. Another problem is the cost of supervising the IVA. IPs will charge c £1,000 per year to service an IVA, if you only have a D/I of £100 then the money left for your creditors after the IP costs have been taken will be minimal meaning that you will need to pay forever to reach the required minimum return. The lowest D/I that can usually be accepted (without mitigating factors like equity releases, pay increases and asset ssales) would be c£200 / month.



Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[MelanieGiles]

The longest one I was ever involved in was for 30 years! The shortest for 30 days! Both extreme examples, but nevertheless genuine. As Oliver says, an IVA starts with a blank piece of paper and you can basically propose whatever timescale you like, but the creditors have various criteria which have developed into custom and practice over the last few years, so the rules are largely set in tablets of stone and 5 years is the term now generally accepted.

An IVA based upon the disposable income you have declared would be unworkable.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk