How long does an IVA last?

The duration required to fulfil your IVA agreement varies based on your financial circumstances, but it usually spans five years (extended to six years if additional payments are necessary). If you possess the means, you can opt to repay your debts through a lump sum, enabling you to conclude your IVA earlier than the standard five-year term.

Conversely, if you are unable to repay the agreed-upon portion of your unsecured debt by the end of your IVA term, a Licensed Insolvency Practitioner will collaborate with you and your creditors to establish new terms and prolong your monthly payments.

What happens at the end of an IVA?

As your IVA draws to a close, it’s natural to be curious about the next steps.

Make your final payment

Initially, an Insolvency Practitioner will verify that you have completed your scheduled IVA payments and adhered to the obligations outlined in your proposal. Upon confirmation of your final IVA payment, you will be notified that your IVA has been successfully concluded. In certain situations, there may be remaining payments due if you took a payment break or had extra months added to your term during your agreement.

Receive a completion certificate

Upon finalising your arrangement, you will be provided with a completion certificate as evidence. You should submit a copy of this certificate to each of the three major UK credit reference agencies (Experian, Equifax, and TransUnion). This will enable them to update their records, ensuring your credit file remains accurate and current. Your outstanding debt will be discharged at this point, and you will officially become debt-free.

Check the Insolvency Register

Three months following the completion of your IVA, it is crucial to confirm that your name has been taken off the Insolvency Register. To accomplish this, visit the Insolvency Service website.

Additionally, requesting a copy of your credit report from each credit reference agency is advisable, ensuring that your IVA has been removed as required.

If the IVA still appears on your credit file, you must contact the agency and request an update to your report.

Rebuild your finances

Upon completing your IVA and removing your name from the Insolvency Register, it’s time to focus on rebuilding your financial situation. Achieving a healthy credit rating may take several years, and your IVA will stay on your credit report for six years from the approval date.

However, by making smarter financial decisions, you can progress towards financial independence more quickly. The disposable income that you previously allocated to your IVA will now be available for your discretion. Many individuals opt to deposit this extra money into a savings account for daily expenses or future financial goals.

Can I get a mortgage after an IVA?

Obtaining a mortgage after an IVA is not impossible, but it can be difficult. For this reason, we recommend waiting until your credit score has improved before applying and considering a specialist lender with experience in assisting individuals with a history of debt. Keep in mind that even if your IVA is no longer on your credit file after six years, lenders may still inquire about your recent credit history, and you are required to disclose information about your IVA.

When pursuing a mortgage after an IVA, waiting until your credit score has improved is beneficial, allowing you to distance yourself from your poor credit history and access better deals. This waiting period also provides more time to save for a larger deposit, which will result in lower monthly mortgage payments.