Dealing with the Fourth Phase of an IVA
Acceptance by creditors of the IVA proposal at the MOC is a high point for many debtors and completes the third phase of the process as described in the last article. The fourth phase is the commencement of the IVA and is the beginning of the execution phase. Following the Meeting Of Creditors (MOC), the chairman of the MOC prepares the ‘Chairman’s Report’ and circulates it to all creditors, to other interested parties (such as mortgage provider or building society), to the court (for Northern Ireland cases but not for cases in England or Wales), and of course to the debtor. In it is summarized the outcome of the MOC and what the debtor must do to successfully complete the IVA. It also identifies the name of the IP who is going to supervise the IVA. This is often although not always the same IP who acted as nominee up until the MOC.
From this point in time, all of the debtor’s unsecured debts will be dealt with under the IVA and creditors must stop chasing the debtor for repayment.
The debtor must immediately commence making monthly payments to the IVA and also contribute when due any other monies required under the terms of the accepted IVA, such as funds becoming available from a release of equity, following a remortgage or sale of property. The supervisor is responsible for distributing these funds to creditors and has various other duties including annual review of the performance of the IVA, ensuring the debtor’s compliance with its terms and reporting to creditors.
And so the IVA proceeds to its finality which we will look at in the fifth and final phase of the process in the next article.
Written by Paddy Byrne
03 / 09 / 2012