You’ve been carefully budgeting for the last five or six years (or possibly a little longer). And then the day finally arrives when your Individual Voluntary Arrangement is done. Then what? Here’s our guide to the final stages of your IVA.
When does an IVA end?
Although IVAs are intended to last five years, many last longer. Most commonly, an IVA will be extended as a sort of trade off for the Insolvency Practitioner (IP) not taking an interest in your home. Rather than surrendering part of the equity in your home or being forced to sell, the IP will often add a further year to your IVA.
There are other reasons an IVA may be extended:
- You may have asked for a payment break (most obviously during the coronavirus outbreak, but a break could be approved as a response to any change in circumstances)
- You may have had an increase in income and seen your payments extended as a result
- You may have switched IPs and payment dates could have changed as a result, extending your end date a little
Ahead of your IP closing the IVA, they are likely to carry out a final review.
What happens at an IVA review?
Often your IP will want to see recent payslips or bank statements to check you’ve not had a salary increase, overtime or a windfall that you haven’t reported.
If you have, your IP is likely to extend your IVA to recover some of the money. If all is as expected, your IP should start the process of closing your IVA, although see PPI below.
I can’t contact my IP!
If your IP doesn’t contact you about the end of your IVA, you should call them. If you can’t get in touch with them send them an email. Wait a week for a response before following up with a further email. If you still get no reply after a further couple of weeks, lodge a complaint.
Throughout this period, keep your standing order or direct debit open if you can. If you choose to stop your monthly payments, put the money to one side where it can be used to pay anything outstanding once your IP responds.
I’m awaiting a PPI refund
You can’t make a new PPI claim except in very exceptional circumstances. But the flurry of last minute claims before the 2019 deadline left an enormous backlog. Some people may not hear back from their banks until summer 2020. If you need to appeal to the Ombudsman, things may stretch even further.
IPs know this. So if you have a PPI claim being processed they may either:
- Keep your case open until the claim is settled (although your monthly payments should stop); or
- Close your case on condition that they can still collect any money paid out on your PPI claim
As your IP will be entitled to claim your PPI money in either event, the better option is to close your IVA and move on. That way you can start rebuilding your credit rating.
Closing your IVA
- Your IVA ends once you receive your Closure Certificate. This can take a while to arrive – sometimes several weeks, so keep contacting your IP if yours is taking its time.
- The IP will update the Insolvency Register so your entry will show ‘completed’ for three months. After that it will disappear from the register entirely. Remember, although the register is a public record (so anyone can view it) you can only search by name. So unless someone is actively looking for your record, they are highly unlikely to stumble across it.
- Your credit record will be updated. IVAs stay on your record for six years from the start of the IVA or until the IVA ends – whichever is longer. If your IVA ends after five years, the record of it will remain on your credit record for a further year. Credit reference agencies don’t update records instantly, so expect it to take an additional month to disappear.
What happens at the end of a Scottish trust deed?
You can’t get an IVA in Scotland. But you can take out a protected trust deed (or Scottish trust deed) which performs a similar role. Reaching the end of a trust deed is as much a cause for celebration as finishing an IVA, and you can find more about what happens when a trust deed ends here.
To get help with your debt, talk to us
- Apply For An IVA
- Is An IVA Worth It?
- Are IVAs a Government Scheme?
- What If I Can’t Pay My IVA?
- Can I Get An IVA If I’m Self Employed?
- Rebuilding My Credit Rating After An IVA
- IVAs: What Will I Need To Show My Insolvency Practitioner?
- Who’s Most Likely to Need an IVA?
- How Much Does An IVA Cost?
- Can I Afford An IVA?
- IVAs – Can I Lose My Home?
- IVA And Trust Deeds | Whats The Difference?
- How Will My IVA Affect My Parents?
- An IVA Mythbuster
- Can An IVA Be Rejected?
Trust Deed Example
Example Unsecured Debts
|2||Credit card 1||£6,812|
Your Monthly Repayments Would Be
a Scottish Trust Deed £748
(total contractual repayments)
a Scottish Trust Deed £295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances. For more information on our fees click here