- Monday, 22 June 2009An
IVA administrator can help to prevent bankruptcy proceedings from being enforced by creditors, reports the Independent.
The publication explains that
IVA companies will put in an application to the courts for an interim order which prevents an individual's creditors from petitioning for them to be declared bankrupt.
Once the IVA is set up, the individual must continue to meet the schedule of repayments drawn up by the
IVA administrator for a period of around five years, after which time their debts will be cleared.
"If 75 per cent of the creditors accept the proposal, a licensed insolvency practitioner is required to prepare a financial report for the creditors and court proceedings," readers are told.
Darius McDermott of investment broker Chelsea Financial Services previously told the Independent that
IVA companies typically oversee the repayment process, preventing creditors from harassing the individual.
He pointed out that, once the term of the IVA is over, the full debt is considered to be cleared even if the sums paid do not reach the amount that was originally owed.
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