Life after an IVA

Wednesday 17 April, 2019 Individual Voluntary Arrangement

An Individual Voluntary Arrangement or an IVA, is a legal method of resolving debt problems. It allows a person to repay a percentage of their unsecured debt back to their creditors in affordable monthly instalments over a fixed term, usually around 5 years.

Once the IVA successfully completes the remaining debt is written off and you’ll be issued with a certificate of completion. At this point any balances outstanding on the debts included in your IVA will be written off.

First celebrate (sensibly that is)

An IVA is a strict means of resolving your debts and a lengthy one at that. Now that it’s over you have gained control of your finances once again and your money is yours to do with what you wish. First things first, celebrate the completion of your IVA!! Congratulations on successfully getting to the end of your arrangement, what an achievement; and a relief I’m sure.

After having your finances under strict review for the past few years it is about time to celebrate this milestone and treat yourself! Now we aren’t talking about a month away to the Maldives to live the life of luxury, perhaps a nice dinner and a few celebratory drinks or a weekend away with your family is more in line with the budget. Whatever you do, be sure to mark the occasion in some way.

Stick to the budget

If there is any benefit to an IVA, other than the fact it helps you get out of debt, it’s that it really teaches you how to budget. Being in an IVA, a large sum of your salary would have been paid into your arrangement monthly, leaving you with just enough to spare. You now have that sum of money to yourself come the end of every month (hallelujah says you) but don’t let yourself fall victim to bad spending habits.

You have survived without this money before, rest assured you can do it again. You can make use of different apps which will help you budget your finances, such as Mint, a personal finance and expense tracker in one which allows you to effortlessly manage your money in one place, creates realistic budgets you can stick to and tracks expenses. Visit our blog on The Best Budgeting Apps for the year 2018 to view your options.

Check your Credit Score

Record of your IVA will remain on your credit file for six years from the date your IVA began. It is your responsibility to ensure that your records are correct and have been updated, so be sure to do this to ensure you are well on your way to financial rehabilitation.

You can check your credit score on websites like Experian, Equifax and Callcredit and compare these all against each other. Ensure there is no adverse information dated after the beginning of your IVA, as there should not be any new information after this date. If you want to know more about credit scores, take a look at our Credit Score blog.

Start repairing your Credit Score

It is important that you work towards restoring your credit score which would have been previously tarnished. There are small, simple things that can be done to help improve this over time, such as;

  • Prove where you live – Register on your electoral roll, lenders are able to verify who you are and make you appear more stable
  • Open a bank account – This can show good money management
  • Get your name on utility bills – Such as a phone contract as this is a form of credit and keeping up to date with payments will greatly help with improving your credit score
  • Get a credit builder card – Paying this off on time will help you to build a positive credit history, however be careful not to go overboard

Start Saving

It is always a good idea to have some money put aside for a rainy day. Simply put a small amount of money away weekly or monthly depending on how you are paid and which suits you best.

Putting small amounts aside bit by bit allows the money to build before you even realise it is missing from your pay packet. To ensure you are saving, you could set this up as a direct debit with your bank to make sure the money is withdrawn and put in to your savings account, this means you wont have to worry about doing so.

People save for different reasons, for emergencies, holidays or even house deposits. Whatever the reason, it is always a good idea to have some money to fall back on to ensure you don’t have to resort to credit to pay for something unexpected.

Some Positive feedback from those Living Life after their IVA

‘Stick with it everyone, at times you do wonder if you will come out the other end, I know I felt like this at times. Strange thing is, no matter how good my credit score is I’m afraid to apply for a credit card, so maybe my lesson is well & truly learned.’

‘Life after an IVA does exist.’

‘There is light at the end of the tunnel, it feels as if a weight has been lifted off my shoulders.’