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What happens when you make your final IVA payment?
This article was written in relation to a debt solution available in England, Wales and Northern Ireland. Debt advice in Scotland involves similar but different solutions. Before considering an IVA as your debt solution, please make sure you fully understand the risks involved when entering an IVA.
It’s been a long journey and you should feel very proud, completing an individual voluntary arrangement (IVA) is no mean feat.
It means you’ve lived without credit and on a budget for five or six years, and of course, the reward at the end of an IVA is that you’re debt free. Congratulations! Now you’ll be wondering, what happens next?
How long does an IVA last?
An individual voluntary arrangement usually lasts between five years if you keep up with your regular, agreed payments.
Paying off an IVA early is possible if you’re able to find the funds to do so. This is called ‘making a lump sum payment’.
So you’re approaching your final IVA payment, what happens next?
Unlike the start of the process where you provides us with lots of details and paperwork, and we asked a lot of questions about your debts, the end of an IVA is a fairly simple process. Even if you’re paying off an IVA early.
We’ll check that you’ve paid in all the overtime & additional income due. If you’ve paid everything to us there’s essentially nothing more for you to do.
Yes, that’s right, it’s much easier than you might have thought to complete an IVA.
You simply make your final payment and we do the rest for you.
IVA completion certificate
We’ll send out your IVA completion certificate as well as your completion report. These prove you’ve done everything you needed to do. This is usually done within 4-6 weeks after your last payment.
And that’s it, you’re debt free. Congratulations.
What about my creditors?
Your creditors will usually update your credit file to show that your IVA is completed within 28 days. However if you do get a copy of your credit report that doesn’t show the IVA is completed you can ask creditors to update the information. To do this you should send the creditors a copy of your completion certificate.
What about my credit file?
Even though your IVA is completed details of this will still show on your credit file for six years from the day it started. So your credit rating may not improve straightaway.
We wrote a blogpost on how to improve your credit rating after your IVA, it gives some useful tips on how to get your rating back on track.
Is there anything else I need to do?
There’s nothing else you need to do, but putting our advisor hats on we’d suggest:
- For the duration of the IVA you’ve been paying all your surplus income into the arrangement and it would be natural to treat yourself to a little something once the arrangement is completed. However we’d also suggest that you maintain your budget for the future; by the time you come to finish an IVA you should really have a firm grip on your expenses.
- And it’s always a good idea to save for a rainy day fund once you finish the IVA. Even saving what you would pay into your IVA for three to four months could build up a great emergency fund in case anything goes wrong with the car or those pesky domestic appliances.
The end of the road
All in all completing an IVA is a real achievement, and we hope you now find yourself with a good solid financial footing for the rest of your life.