If you’re wondering what happens when your IVA debt solution ends, let us ask you this – do you want the good news, or the bad news? Let’s start with the bad news, and then we’ll explain why, when it comes to your debt problem and an IVA, the good news means that the bad things really aren’t that bad after all.
THIS is what happens when your IVA ends
The final review of your IVA
An IVA debt solution will usually last for either 60 or 72 months (five or six years). Most IVAs last for 60 months, although your IVA may last 72 months (or longer, in some instances) if property is involved.
Once your IVA comes to an end, your remaining debts will be written off (anything up to 80% of the total you originally owed). You’ll then be completely free of your debt problem.
Once you’ve made your final IVA payment (or in some cases in the few months before), your IVA Provider will undertake a final review. The larger of IVA Providers will have an in-house team to handle this, known as a closing team. This might involve your provider asking for bank statements, payslips or your latest P60. They ask for this in order to review your current income. If they find that you’ve had a large increase in income, you may be required to make further payments to your creditors.
Once the final review is complete, your last payment will be sent to your creditors.
From start to end these final few steps can take between six to eight weeks, after which time you should receive a Completion Certificate. If you still haven’t received it at round the five-month mark, you should complain to your IVA Provider.
Updating the Insolvency Register
Once the Completion Certificate is issued, the IVA Provider will update the Insolvency Register to reflect the end of the IVA. Your details will remain on the register for three months (during which time the IVA will show as ‘completed’). Following this your details will be wiped from the Insolvency Record, and your information will be updated with all three credit reference agencies informed.
That should be the end of the process, however in rare instances you may receive a nice surprise in the form of a cheque from your IVA Provider. This would happen if there have been some payments that have been sent to your creditors, but they haven’t been claimed (usually this is down to some type of admin error).
Should this happen to you, your case is still closed and your debt problem is over. And yes – you are allowed to keep the cheque!
The bad news and the good news
There’s no two ways around it – an IVA will damage your credit record. However despite an IVA impacting your credit record for six years following the date the agreement began, there is light at the end of the tunnel.
The debt problem that led to you requiring an IVA means that your credit history will likely have been severely impacted by late and/or missed payments before the IVA even began, and it’s entirely possible to repair your credit rating once your IVA is complete.
Arrived here exploring Individual Voluntary Arrangements as you’re considering applying for one? If so, don’t move ahead without speaking with our team first.
National Debt Help are a team of UK-based debt experts who specialise in connecting people with debt problems with the right debt solutions.
If you need advice on your debt problem and whether an IVA is right for you, our team are perfectly placed to advise.
Call us for free on 0800 002 9051. You can also use our contact page and we’ll call you back.