If you are in the last few months of your IVA, you will be looking forward to making that last payment. It may feel a lot like getting to the finishing line of a marathon…
But when should you cancel your standing order? How long does it take to get your completion certificate? And when exactly are your debts written off?
This article looks at what happens at the end of an IVA.
Are you sure that is your last payment?
With a simple five or six year IVA, possibly with a further twelve months added instead of a remortgage, you may know exactly when your 60th or 72nd payment is going to be made.
But sometimes it’s less clear:
- there may be some payments outstanding if you had a payment break or extra months were added because of additional income;
- a change of IVA firm won’t by itself change the end date, but admin problems could happen so there is more chance that payments are outstanding;
- if you have a house but your IVA firm hasn’t spoken to you about releasing equity, don’t assume an extra year isn’t needed.
So it’s always worth checking with your IVA firm a couple of months before “the end” that Oct 2018 or whenever really will be your last payment.
A final review by your IVA firm
Your IVA firm will do a final review. Most of the larger firms have a special Closure Team that deals with this. Some firms do the review in the last couple of months, others wait until after your final payment.
It’s a bit like your annual reviews. Some firms ask for bank statements, payslips or a P60. They want to check if you had a lot of overtime, a pay rise, a bonus or some other windfall that you haven’t told them about. If you have, you may have to make some additional payment.
Hopefully after this, the firm will confirm that no more payments are needed and you can cancel that STO or DD.
What if they don’t get in contact?
If you haven’t heard from your IVA firm a couple of weeks week after your last payment, I suggest phoning or emailing them. Ask what you need to provide for the final review. The more you are pro-active at this stage, the quicker this will be over.
If they still don’t talk to you, then send them a weekly email. After a month put in a formal complaint.
If you want to cancel your STO / DD, I suggest you put the money you would have transferred into a separate savings account, don’t spend it. That way if it turns out there is still some money owing, you have it right there.
Your IVA firm closes the IVA
Once the Closure team confirm that you have made all the payments, they will distribute the last money to your creditors.
If you haven’t already agreed to the firm collecting PPI after your IVA has finished, you will probably be asked to sign something. If you don’t, the firm may refuse to close your IVA until they are certain there isn’t any more PPI to come – this could be years.
This may feel unfair but they are allowed to do this. If you want your IVA closed, you are going to have to sign.
This closure procedure used to take 6-8 weeks, but sometimes there can be long delays. If your Completion Certificate hasn’t arrived after three months, I suggest asking every few weeks what is happening and whether you need to provide any more information.
If it gets to five months after your last payment, put in a formal complaint to your IVA firm. At six months put in a complaint to the Insolvency Service about the delay in closing your IVA.
At last you will get your Completion Certificate:
- Your IVA is over. The final dividend has been sent to your creditors and the remainder of your debts are written off.
- Your IVA firm will update the Insolvency Register. Your name stays on the register showing as “completed” for three months, then the entry is deleted.
- The Insolvency Register sends the information that you IVA has completed to the three Credit Reference Agencies. The IVA marker will remain on your credit records until 6 years from the start if your IVA. or uuntil it is completed, whichever is later.
- If you have a house, your IVA firm will remove the restriction placed at the Land Registry so you can sell it.
Check everything has been updated
You should check that all the has worked properly. Leave it a couple of weeks and then look up your details on:
- the Insolvency Register – if this isn’t correct, call your IVA firm and ask them to correct it:
- Experian, Equifax and Call Credit – you do need to check all three. If your IVA still shows as active, send a copy of your Completion Certificate to the credit reference agency and ask them to correct it;
- Land Registry – if the restriction is still showing, call your IVA firm.
After this, wait another month, to give your creditors time to update their records.
Then you can start the process of cleaning up your credit file, see How to improve your credit rating after an IVA for details. This will ensure that your defaulted debts disappear when they should and that you start getting positive ticks each month on your credit records.
The process of improving your credit score is exactly the same if you have settled your IVA early.
So that’s the end. Except…
After that, everything has finished. You shouldn’t hear from your IVA firm again. There are two exceptions here.
One is unusual, and if it happens to you it’s good news – see Why have I been sent a cheque for unclaimed dividends? for details.
The other one is PPI complaints. If your IVA has finished in the last few years, you have probably been asked to agree to your IVA firm collected PPI after the closure. If your IVA finished longer ago, your IVA firm may still claim any PPI refunds you apply for, see PPI after IVAs have finished.