Life After An IVA
You’ve probably dreamed of the moment your IVA would be finished. For five long years you have diligently paid your dues and now you’re about to be free. Free of the payments, free of the debt that has occupied your life for too long.
So now what? What do you do when there’s no more IVA in your life?
First celebrate (but don’t go mad!)
Completing your IVA is a huge achievement, and one that deserves a celebration. That first time that salary goes into your bank account and it’s all yours is a wonderful feeling. Take some time and some of that money and do something you’ve wanted to do for a while but couldn’t because of the IVA. Some people go away for the weekend, or get expensive tickets for a show they’ve wanted to see. Other people buy a piece of jewelry or even a new winter coat if they’ve put it off for a few years. Whatever you do, make sure to mark the occasion in some way.
Stick to the budget
For the last five years you’ve learnt how to live within your means, to live according to a budget. Your new financial knowledge has been hard won and will help you build a solid financial foundation for your future. While the temptation to throw caution to wind is very strong now you are debt-free, it could land you back in debt before you realise it.
In the months that follow your IVA discharge, stick to your budget as much as possible for safety.
Check your credit record
Your IVA will be listed on your credit record for the duration that you have it, however once you make your last payment your creditors should put a notice on your record to say the debt is re-paid and when it was.
It is not always done correctly so you must check the records that credit agencies Experian and Equifax hold to see what has been recorded. Sometimes creditors put in dates well beyond your finish date or even without a date at all. If this has happened you should write a letter requesting the dates be corrected.
Wait a few months after your last payment to allow the paperwork to catch up and then check and correct if necessary.
You will not have been allowed to save for any reason during your IVA, but there’s nothing to stop you now putting aside some money. It’s always a good idea to have some cash in reserve, if only to ensure you don’t have to resort to credit to pay for something unexpected, like a large repair bill.
Some people aim to have enough to cope with an emergency, such as a boiler breakdown or large car repair bill, others set a goal to save for a house deposit if they want to own their own homes.
Whatever the reason, start saving as soon as your last IVA payment is taken.
Start repairing your credit record
Your IVA will last on your credit record for six years from the time of your last payment, and at times will prevent you from doing things you want to. The most important thing you can do is find ways to help repair your credit record in the most low risk way possible. Do not go out and obtain payday loans and pay them back to show you are financially responsible – that will work against you on your record as payday loans are a black mark on your credit record.
Instead find small ways to make consistent monthly payments and demonstrate your financial responsibility. There are many other ways of taking small but consistent steps to repair your credit. For example, if you can get a credit or budget card even with a very low limit, use it to pay one small bill or living expense every month, such as a week’s shopping. Pay it off immediately when it becomes due. This way you build up your credit rating with many small but successful payments.
The key to repairing your credit rating is to do it slowly, consistently and as low a risk as possible.
To find out more about IVAs and whether they are right for you, call now and speak to one of our experienced IVA advisers now on 0800 987 5337
Example Unsecured Debts
|2||Credit card 1||£6,812|
|3||Credit card 2||£4,092|
|4||Credit card 3||£5,399|
|4||Credit card 4||£5,200|
Your Monthly Repayments Would Be
an IVA £748
(total contractual repayments)
an IVA £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