Dealing with the Fifth Phase of an IVA
The fifth and final phase of the IVA could be described as the beginning of the end of the debtor’s financial nightmares. Many insolvent debtors who choose to enter into an IVA enjoy and indeed celebrate this final phase. The utter joy of seeing the light at the end of the debt tunnel and the cessation of creditor harassment is almost universal. Provided the debtor sticks to the terms of the IVA they can expect to be debt free at the end of the term which is often five years.
During the term, the supervisor must of course review the debtor’s changing financial circumstances and report regularly to creditors. If the debtor’s income should increase over and above any increase in the cost of living, then part of the additional net income will also have to be paid into the IVA.
Provided the debtor maintains payments there is no reason why the IVA should not be successfully concluded. Even if there should be a serious adverse change in the debtor’s financial circumstances during the life of the IVA, the supervisor may be able to offer creditors proposals to vary its terms so as to take account of such changed circumstances and to enable successful completion of the IVA so that the debtor becomes debt free. If the debtor keeps up their part of the deal they can look forward to being debt-free, worry-free and creditor-free and at the conclusion of the IVA they can look back with pride in navigating the financial journey to its completion. The debtor can begin to repair their damaged credit records
and can again begin to seek and avail of credit with the benefit of having lived and survived for perhaps five years without it. Hard lessons will have been learned but the future can indeed look rosy again.
Written by Paddy Byrne
03 / 09 / 2012