Once the terms and conditions of the IVA have been agreed upon by the creditors, the debtor has 30 days to make the first payment to validate the agreement. In addition, they are obligated to keep up with the payments in order for the agreement to be successful. Payments are typically made by standing order on a date that is convenient for the debtor (payments are typically made a few days after the debtors to prevent them from squandering).
However, the debtor is required to notify the IVA Supervisor if they are unable to make a monthly payment, as the agreement is likely to fail. Even though in the majority of IVAs there is a clause that specifies the agreement will fail if the debtor makes two late payments.
Under very specific conditions, an early settlement of the IVA may also be feasible. These include a third-party contribution to the agreement's settlement and the sale or refinancing of a property.
If the IVA is resolved as a result of a contribution from a third party, the debtor must provide creditors with an explanation of how the funds were obtained.
If the settlement of the IVA occurs after the sale of the debtor's property, the proceeds from the sale may be sufficient to provide a full and final settlement of the IVA.
In the event that an IVA is resolved after the re-mortgaging of the debtor's property, the equity generated will enable the debtor to make full and final payment of their debts. However, unlike the sale of a property, the debtor is advised to consult with a specialist to ensure that this option is affordable for them.
In any instance, the creditors of an IVA must consent to an early settlement. The supervisor will submit a proposal detailing the early settlement's justification and the terms of the offer. If the proposal is approved, the creditors will have three months to receive their money.
A certificate of completion is issued to the debtor upon conclusion of the IVA, which is also sent to the debtor's creditors to inform them that the IVA has been satisfied. In addition, the debtor receives a statement detailing the amount paid into the IVA and how it was distributed among creditors. Finally, the Insolvency Service will amend its records to reflect the successful completion of the IVA and will request that credit agencies do the same.
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