While there is a lot of information regarding what an Individual Voluntary Agreement (IVA) is, many
people want to know what happens when an IVA ends. It is important for anyone considering an IVA to
also consider life at the end of it and how future credit and so on may be affected.
Duration of IVA and Credit history
An IVA is a contractual agreement for a fixed period, which usually lasts for a 3 to 5 year period.
An IVA is also logged on an individual’s credit file and will remain there for 6 years FROM THE START
of the agreement. This means that for an individual undergoing an IVA over a 5 year period; it will
remain on their Credit File for a further 12 months (assuming the IVA was completed successfully).
While the Credit File will be clear after this time, should the individual wish to apply for further
credit, they may have to declare that they have undergone an IVA.
Once an IVA is completed, it is the responsibility of the Insolvency Practitioner (IP) to notify
all the relevant parties, including the court services and credit agency. It can take some time to
rebuild credit ratings after an IVA is complete, although it would be advisable for any individual
in this situation to try to avoid further credit until accustomed to a different financial situation.
For those looking to get a mortgage after an IVA is complete, it could be difficult to get the best
deals, especially straight after IVA completion, and a mortgage lender may request a higher deposit.
Whatever happens, it is vital that the applicant is honest about their credit history.
However, once an IVA is over, the individual WILL find themselves with far more financial flexibility
as they will be effectively debt free, as confirmed by the Certificate of Completion issued upon
successfully finishing an IVA. This also allows the creditors to write off any outstanding debt. Any
money previously paid into the IVA will now be the individuals to do with as they wish. Hopefully,
after several years of budgeting, the habit will continue and debt will be a thing of the past.