When a person has decided that an Individual Voluntary Arrangement (IVA) is their preferred option to solve their debt problem, they will instruct an Insolvency Practitioner (IP) to assist them in preparing their Individual Voluntary Arrangement (IVA) proposal.
This process generally takes between 5 and 8 weeks to complete.
During this ’setting up’ period, the IVA applicant is not actually protected by the Individual Voluntary Arrangement (IVA) agreement.
The Individual Voluntary Arrangement or IVA will only become legally binding and able to offer protection from creditors taking legal action when the IVA has to be agreed by the creditors at the Creditors meeting‘.
Therefore, in extreme cases, it is possible that creditors will try to commence legal action against an IVA applicant prior to the Individual Voluntary Arrangement (IVA) creditors meeting taking place.
Faced with this situation, an IVA applicant has the option of applying for an ‘Interim Order.’
An Interim Order is a court order and is applied for at the IVA applicant’s local County Court.
When the Interim Order is lodged in court, the applicant is immediately protected from the commencement, or continuation, of any legal action by his creditors, for a set time period, usually beyond the date of the Individual Voluntary Arrangement IVA creditors meeting.
N.B.. It is particularly useful when a Bankruptcy petition has been served, or when a creditor is applying for a charging order over a property.
When the Interim Order is in force, the Individual Voluntary Arrangement (IVA) process can continue towards the creditors meeting without threat of further action being taken by any creditor
At the time of writing this article there is a court fee of £180 for each proposal, i.e. an Interim Order Application for a joint IVA would be £360, and therefore should only be applied for when there is a real threat of legal action being taken against the client.
If you would like more information about Individual Voluntary Arrangements (IVAs), or have any questions related to the Individual Voluntary Arrangement (IVA) subject, call My IVA Adviser for free on 0800 088 7503 anytime.
Related Articles: