IVA Articles
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IVA : What is an Interim Order?
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 client is not actually protected by the Individual Voluntary Arrangement (IVA) agreement.
The Individual Voluntary Arrangement (IVA) will only become legally binding, and therefore, offer the client protection from their creditors taking legal action over the recovery of the debt, when the Individual Voluntary Arrangement (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 the debtor prior to the Individual Voluntary Arrangement (IVA) creditors meeting.
Faced with this situation the client has the option of applying for an 'Interim Order.'
An Interim Order is a court order and is applied for at the client's local County Court, and when the Interim Order is lodged in court, the client is immediately protected from the commencement or continuation of any legal action by the 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 there is a Bankruptcy petition by a creditor, or when a creditor is trying to obtain 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 the overhanging threat of a particular creditor.
There is an court fee of £150 for each proposal, i.e. an Interim Order Application for a joint IVA would be £300, 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 myIVA-Adviser.com for free on 0800 088 7503 anytime.
