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Life after an IVA

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 five 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.

Celebrate Your Financial Freedom

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 and becoming financially free; what an achievement.

After having your finances under strict review for the past few years, it is about time to celebrate this milestone and treat yourself. Obviously we aren’t talking about a month away to the Maldives to live a 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 IVA 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, every penny is accounted for and any disposable income is paid into your arrangement. 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 use different apps that will help you budget your finances; a personal finance and expense tracker which allows you to effortlessly manage your money in one place creates realistic budgets you can stick to and tracks expenses. 

Best Budgeting Apps

There are lots of apps out there for budgeting. We’ve compiled a list of the ones we think are some of the best;

  • Emma – a personal finance and budgeting tool that claims to help you save up to £600 per year! Emma not only keeps track of your finances but recommends ways to make savings and cut-backs too. It is a free app with the option of upgrading for a fee.
  • Yolt – this intelligent finance app connects to your bank accounts and lets you know where you’re spending your money and where you can save. It’ll also remind you when payments are due to leave your account or when it’s safe to spend.
  • Money Dashboard – a multi-award-winning app that allows you to see how you are spending your money, giving visual representations of your budget and where you could be cutting back.
  • Wally– this long-standing budget and savings app is a firm favourite, with the likes of Forbes and the BBC having recommended it. With its ‘family group’, Wally is great for budgeting a whole household. 

Check Your Credit Score

A record of your IVA will remain on your credit file for six years from the date your IVA began. This may be as soon as you make your final payment or it may be another 12 months after your agreement ends. Your IVA provider can’t update your credit score, only your creditors can – and they are given a copy of your final report which should trigger them to do the update. It’s understandable that you would want to see an improvement on your credit score – so keep an eye on it after your IVA completes. If there are creditors that haven’t updated it, you can get in touch with them, or to the credit reference agencies directly, and ask that they be updated.By doing this, it ensures you are well on your way to financial freedom.

You can check your credit score on websites like Experian, Equifax and Callcredit (now TransUnion) 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 guide to Understanding Credit Scores.

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 you can do to help improve this over time, such as;

  • Prove where you live – Register on your electoral roll; lenders can 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 improve your credit score.
  • Get a credit builder card – Paying this off on time will help you 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 or standing order with your bank to make sure the money is withdrawn and put into your savings account; this means you won’t 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.

If you’re coming to the end of an IVA with Debt Movement and have any questions about what the final stages involve, how to go forward after your IVA is complete or any other concerns, contact our friendly and professional team today. Our guides will help put your mind at ease about the transition into your financially free life!

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