Length of an IVA

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rod
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by rod » Fri May 12, 2017 10:10 am
Hello. Is 7 years the maximum legally permissible length of an IVA regardless of circumstances? Thanks.
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kallis3
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by kallis3 » Fri May 12, 2017 10:21 am
Hi,

I don't think there is any set time - I do know of one IP who set one up for 17 years!! It all depends on circumstances at the time. Have you approached anyone at all?
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Lisa Thomas
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by Lisa Thomas » Fri May 12, 2017 10:34 am
There is no maximum but the 'norm' is 5 years with a potential 1 year extension for lieu of equity in a house. When NRAM are a creditor they tend to insist on a 6 year standard term (plus the extra year if applicable re equity) so maximum is often 7.

The key is to compare IVA proposals to that of what creditors might receive if the IVA is rejected and Bankruptcy ensues.

The IVA should be the same or more attractive that BKY for creditors to find it attractive enough to vote in favour of the IVA.

Your Nominee should be able to advise for you.
redboxtree
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by redboxtree » Fri May 12, 2017 11:34 am
At the end of the day you need to look at what meets your needs are and whether you can cope with restrictions being in place for any given length of time.

If you enter into an IVA for 5 years at 40 that is just over a 10th of your life you are committing to it at least (and that does not include how long it could take to be closed).

A 17 year IVA would be a third of your life if you took it out at 40.

A lot can happen that is outside of your control and that includes being moved to another company and there has been one case where an IVA company itself went insolvent leaving everyone in limbo.
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Lisa Thomas
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by Lisa Thomas » Fri May 12, 2017 1:44 pm
I cannot think of any circumstances where a 17 year IVA would be appropriate - this sounds more like a DMP.
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Foggy
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by Foggy » Fri May 12, 2017 3:19 pm
The longer an IVA is proposed to run for makes it a less attractive option and alternative routes will depend upon your circumstances.
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kallis3
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by kallis3 » Fri May 12, 2017 3:42 pm
Just to answer Lisa - it was for a hefty sum and, although it did eventually fail, it was an IVA and I know the IP well.
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