What happens when my IVA finishes?
Of the many questions we're asked regarding IVAs and the processes involved with IVAs, the question of what happens when the IVA finishes is often overlooked, but we feel it is of real importance.
With the sheer volume of information to be absorbed in the set-up process, it isn't until later that this question emerges.
But finally, when the dust has settled and you're able to take a moment, you may find yourself wondering exactly what happens at the end of your IVA, when it's completed successfully.
What Happens After The IVA
So - what does happen when your IVA reaches a satisfactory conclusion?
Does it really make you debt free?
Will it be the end of your financial worries?
Will you ever be able to get credit again?
(Take this link to our article about how an IVA effects your credit rating)
Well, to put it quite simply, YES!
Marching to debt freedom
There's no doubt that at sometime during the early stages of your IVA, you'll feel that you'll be repaying your debts forever, but this will pass as you become accustomed to living within your IVA budget.
Sooner or later the prospects of reaching the end of your IVA will grow stronger.
And, often, it helps to focus on the fact that, once you've successfully completed your IVA, your creditors will be legally obliged to write-off any outstanding debt.
Guaranteed, you will be debt free.
Positive budget balance
From now on, the money you'd been paying into the IVA each month will now be yours to spend on exactly what you like. You'll have money in excess of your needs, which, of course, means financial freedom.
Once you are free of your debt you'll get a fresh start. For the first time in years you'll be living within a balanced budget, but now with a positive budget balance.
Initially, for some, the thought of obtaining credit will seem quite unnecessary now they've learnt to live without credit.
Rebuilding your Credit Rating
However, if you wanted to return to spending money on credit you will have to begin the process of rebuilding your credit rating. To help you, here's a brief explanation of what you can expect to happen and the actions you need to take to improve you chances of obtaining credit after an IVA.
On the successful completion of your IVA, your supervisor will issue you with a 'Certificate of completion'.
This should arrive after between 3 - 6 months after your IVA payments have stopped, once your supervisor's satisfied you've met your legal obligations under the IVA.
The supervisor will, as part of their final duties, pass a copy of the certificate of completion to the Insolvency Service so that they can update their records and remove your name from the Insolvency Register.
Your creditors will be informed of your successful completion of your IVA by your supervisor as well, so you will not be required to contact them.
Things you should do
It is in your interests for you to take a copy of your 'Certificate of completion' and send it to the Credit Reference Agencies (CRA), to enable them to update their records showing your IVA was successfully completed.
The main CRA's are:
- Equifax: www.equifax.co.uk
- Experian: www.experian.co.uk
- Callcredit: www.callcredit.co.uk
You should also take a look at the Insolvency Register 3 months after you receive your Certificate of completion, to ensure your name has been automatically removed.
If it hasn't, you cant notify the Insolvency Service by clicking the 'report an error' link at the foot of the page containing the details of your case.
It will take some time for your credit rating to rebuild, during which time obtaining credit may be difficult, however, as time moves on getting credit will become easier.
Gentle reminder
Please Note: We strongly recommend you try to resist the temptation of entering into another credit agreement as soon as your IVA has completed. We believe you should take time to adjust to your new financial situation and the benefit of having no unsecured debt or no IVA payment to make.
If you do need to take credit, please make sure you can afford your repayments and if you are in doubt, seek advice from an 'Independent' Financial Adviser.
If you would like to discuss this or any of your personal circumstances with one of our specialist IVA specialist advisers, just call 0800 088 7502 for free, anytime.
For a full explanation of the IVA Process click here.
